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Australia is watching a quiet shift take shape as more players move towards offshore gambling sites, creating a gap that licensed operators and regulators can no longer ignore.
A growing online market is moving beyond Australia’s borders
The new analysis from H2 Gambling Capital shows the scale of the problem in plain numbers. Australians are losing A$3.9bn each year on offshore gambling sites, and the figure is expected to climb close to A$5bn before the end of the decade.
These sites now represent 36 percent of all online gambling activity. The shift is reshaping industry expectations and raising questions about how the regulated market can keep pace.
Tax revenue and sports funding face significant pressure
If this trend continues, governments are projected to lose nearly A$2bn in tax revenue within five years. Sporting and racing bodies are also bracing for a shortfall of around A$800m, putting pressure on a sector already dealing with rising operational costs.
The report outlines how these offshore channels avoid the requirements that Australian operators must follow. Licensed companies must meet strict standards for customer verification, behavioural monitoring and harm-prevention tools. None of these safeguards are guaranteed when players move offshore.
Why offshore sites keep drawing players in
RWA CEO Kai Cantwell said many offshore platforms operate from jurisdictions with little oversight. This creates situations where customers have few options if their funds disappear or if an operator simply stops responding.
The study also found a major issue with BetStop, the national self-exclusion platform. Half of the Australians who gambled on offshore websites were listed on BetStop at the time. It shows how easily players can move outside the regulated system, even when they have taken steps to block themselves from harm.
Marketing tactics blur the line between legal and illegal operators
The research highlights how illegal providers rely on influencer campaigns, affiliate sites and high-value promotions to appear legitimate. This trend has already triggered ACMA’s clampdown on influencer advertising linked to gambling, signalling a tougher stance on misleading promotions.
Nearly half of the surveyed users said it was difficult to tell the difference between a licensed operator and an offshore website.
With no tax obligations or safer gambling contributions, these offshore brands can offer bonuses, elevated odds and online casino games that regulated operators cannot legally match. These incentives remain powerful drivers of offshore engagement.
Regulators are blocking domains, but the challenge is growing
The Australian Communications and Media Authority continues to block illegal websites, but the pace of new domains appearing remains a challenge. Recent enforcement actions, including recent ACMA blocks on illegal gambling websites, show how regulators are trying to slow the expansion but continue to face an uphill battle.
RWA said the response needs to be broader, involving financial institutions, tech platforms, regulators and sporting partners working together to disrupt offshore networks.
A story that raises deeper questions for the future
The data paints a picture of an industry where the regulated market is losing ground, the tax base is shrinking, and vulnerable customers are choosing products without safeguards. As the offshore market grows, the gap between protection and exposure becomes wider.
What happens next as Australia decides how to pull billions of dollars and millions of players back into a regulated, safer system?
Source: NEXT.io
