Fighting the black market – the infinite game

Introduction

With the rise of the global gambling industry and its constant, rapid evolution in recent years, the expansion of online gambling platforms, driven by technological innovation, has simultaneously fuelled the growth of unregulated markets. The increasing presence of unregulated markets, with an activity that is not supervised by the legal authorities, has become one of the main challenges facing the gambling industry.

Recent empirical research reveals the scale of this challenge, exposing the extent to which unregulated operators have invaded regulated markets. According to studies published by Yield Sec on illegal online gambling, unregulated markets accounted for 71% of the European Union´s online market in 2024, representing an estimated 80.6 billion in gross gaming revenue[1] and an annual loss of 20 billion in EU tax revenue.

Such research also appoints more than 6.200 active illegal gambling operators, targeting consumers within the European Union and an approximate percentage of 92% of all gambling-related content seen online by consumers of these states can be linked to unlicensed operators.

The magnitude of these figures indicates a substantial expansion of illegal gambling market activity, extending to multiple regulatory and economic dimensions. As unlicensed operators operate outside the mandatory safeguards designed to protect players, this increases players’ exposure to risks. Simultaneously, illegal operators compromise the competitive position of licensed operators, whose compliance and fiscal obligations are integral.

This article will analyse the evolving landscape of the black market, assessing the effectiveness of measures adopted by regulators across jurisdictions to combat and end the “war” between unregulated and regulated markets. The analyses will explore how Simon Sinek´s game theory offers a fresh perspective and a strategic approach to this reality.

The Game Theory: A Simon Sinek perspective

Simon Sinek´s game theory distinguishes between two types of games: finite and infinite.

According to his understanding, finite games are characterised by known players, fixed rules, and a clear endpoint to which winners and losers can be identified. By contrast, in the infinite games, there are no clear winners and losers. What characterises such games is the inclusion of known and unknown players, defined by evolving, open rules, and oriented toward the perpetuation of the game rather than the achievement of a final victory.

In his TED Talk, Sinek applied this theory to explain and analyse some of the United States’ most well-known geopolitical conflicts, such as the Vietnam War and the Cold War. History and these two examples present a crucial, concrete example of how game theory and playing infinite games can yield positive long-term outcomes. In contrast, finite games can be won, but there is no guarantee that the underlying systems and opposing forces will remain in place in the future, even if with different players.

Take Sinek’s example: the Vietnam War, a clear case of two main players, North Vietnam and South Vietnam, backed by the US, with different mindsets. The US fought to win, but Vietnam fought to live and would keep fighting as long as needed. The outcome was clear. This incompatibility left the finite player, the US, in an impasse and eventually led it to withdraw from the game.

As for the Cold War, a conflict that could pit communist and capitalist countries against each other, the US again had the same mindset: play to win. Although the outcome can be attributed to the US as the victor, over time, we still face the same geopolitical instability, with different players.

Moreover, such a theory is also raised by Sinek and is applicable to business companies and the emergence of new technologies. A crucial example of a finite game player is the reality that Blockbuster faced and its failure to adapt to new streaming platforms such as Netflix. Its refusal to adapt to new technologies led to bankruptcy[2].

In his book The Infinite Game, Sinek goes further and identifies five essential practices for those who wish to play the infinite game successfully: a Just Cause (a compelling vision that goes beyond short-term objectives), Trusting Teams (building collaborative ecosystems rather than siloed enforcement), Worthy Rivals (studying what others do better as a source of continuous improvement), Existential Flexibility (the willingness to fundamentally change strategy when the current one no longer serves the cause), and the Courage to Lead (prioritizing long-term goals over short-term political or public pressure)[3]. These five practices, when considered together, provide a structured framework that can be transposed to any field where the challenge is not about winning a single battle but about sustaining a long-term strategy against an adaptive adversary.

Nevertheless, and this is where such a theory can also have an impact. Its transposition to the Gaming Industry, and, more specifically, to the black market, has a significant impact and can be seen as a major threat. To play an infinite game means not to cease the problem with a single play but to keep on playing, to learn how battle and deal with the enemy, and in due time, the ultimate result will be the exhaustion of all resources and mechanisms that can circumvent the situation and keep the war alive. Ultimately, this action and mindset will lead to the withdrawal of the weaker player.

The finite game: Are regulators playing a finite game?

European states use various regulatory and enforcement tools to tackle illegal gambling, aiming to reduce these problems to zero. Most efforts focus on limiting exposure, restricting access, and tight regulatory control. Authorities have been using measures and legal mechanisms such as advertising restrictions, spending caps, ISP blocking, and domain blacklisting.

Some jurisdictions aim to attack the enemy through tough advertising policies. In Spain, Royal Decree 958/2020 aimed to restrict gambling advertising, including banning celebrities from promoting gambling. The Spanish Digital Gaming Association challenged and successfully annulled the law, as the Spanish Supreme Court found it lacked legal basis. Although the reform was not upheld, it illustrates a regulatory approach aimed at addressing gambling-related harm through comprehensive prohibition rather than incremental or adaptive controls[4].

Many jurisdictions have also turned to criminal and administrative enforcement to deter illegal gambling. In the UK, unlicensed gambling can lead to criminal charges, jail time of up to 51 weeks, and fines. These penalties show how seriously illegal gambling is treated, but enforcement remains focused on operators within national borders.

Technical enforcement tools, particularly website and domain blocking, have also been widely adopted. In Greece, regulators have registered and blocked approximately 11,000 illegal gambling domains. However, such measures predominantly affect known and existing websites and do not prevent the rapid emergence of new domains operated by the same or related entities[5]. As a result, domain blocking functions primarily as a reactive mechanism targeting individual access points rather than as a comprehensive solution to market-wide illegal activity.

Product and operational limits in regulated markets have had indirect effects. Germany’s laws set a €1 maximum bet per online slot spin, require a five-second pause between spins, ban autoplay, and set a €1,000 monthly deposit cap. These rules help protect consumers, but the unregulated market suggests that such limits may drive players to seek out less-restricted sites.

Similar trends arise in other Member States. France bans online casino games, leaving players with no legal option for these products. In Portugal, the limited range of legal online gambling leads some players to illegal platforms with more choices.

Alongside these national regulations, cross-border regulatory cooperation has gradually increased. Authorities in Austria, France, Germany, Italy, Portugal, Spain, and the United Kingdom have entered into agreements to address illegal gambling activity together. These initiatives focus on sharing information about unlicensed operators, enforcement, and sanctioning practices. This reflects recognition of the transnational nature of online gambling markets[6].

This coordinated approach has been shaped by reports showing rapid growth in illegal online gambling ads on social media, video content, and affiliate networks. Data showing that more consumers are exposed to unlicensed operators has increased regulatory awareness and triggered calls for greater cooperation. Recent analyses suggest this environment has led to greater scrutiny of marketing, payment flows, and intermediary roles, along with a stronger focus on collaborative enforcement and regulatory information sharing.

Does the industry’s main challenge demand a change in regulatory mindset? Should regulators embrace the infinite game approach, accepting ongoing adaptation rather than aiming for a single, final victory over the black market?

Drawing on the analysis in iGaming Business’s article “Europe’s Illegal Gambling Market: What’s the Solution?”[7], the persistence and expansion of illegal online gambling highlight that current enforcement strategies are not effective. Reports from February 2023 and later confirm that regulatory action against the black market has produced little change. Data show that unlicensed activity is far more extensive than previously thought.

The article highlights that certain regulatory interventions, intended to limit and eliminate illegal markets, have, in practice, contributed to the redirection of consumer demand toward unregulated operators. The tightening of regulatory frameworks through rigid and highly restrictive rules has not demonstrably weakened the structural foundations of the black market.

Rather, it has coincided with the emergence of new adaptive mechanisms that enable illegal operators to sustain and expand their presence. The analysis further notes that views remain divided on whether current enforcement actions meaningfully constrain unlicensed actors in licensed markets.

At the same time, the continued growth of the illegal sector has reinforced the need for more responsive and coordinated regulatory approaches, exemplified by the European Union’s recent approval of the European Gaming and Betting Association’s standard on markers of harm. This development reflects an acknowledgement that maintaining market integrity and player protection requires regulatory frameworks that can evolve in parallel with the adaptive dynamics of illegal gambling markets, rather than relying solely on restrictive controls.

While the present regulatory action plays an important role in addressing illegal gambling, the observed outcome underscores the relevance of alternative analytical strategies and perspectives. The abovementioned examples and measures adopted by Regulators may be examined through Sinek´s geopolitical framework, in which such intervention faces an enemy characterised by multiple actors, evolving strategies, and varied forms of behaviour.

These non-responsive results indicate that an approach primarily focused on market restrictions is not presenting the data and results needed to address the problem, and is contributing to its expansion, through different and innovative ways.

Playing the Infinite Game: Toward Solutions

If the analysis presented so far suggests that regulators have been playing a finite game, the question becomes: what would an infinite game strategy look like in practice? Sinek’s five practices offer a useful roadmap. The first, a Just Cause, requires regulators to articulate a compelling vision that goes beyond simply eliminating the black market. A more effective framing would be one centered on building a gambling ecosystem where all players benefit from consumer protection, transparent operations, and legitimate competition. This shift in objective, from eradication to sustained market integrity, fundamentally changes the nature of every regulatory intervention that follows.

The second practice, Trusting Teams, points to the need for multi-stakeholder coalitions. The jurisdictions showing the strongest results are those that have built enforcement ecosystems rather than relying on a single regulatory body. Germany’s collaboration with 43 payment service providers to block transactions to 165 illegal platforms, and the UK Gambling Commission’s partnerships with search engines, ISPs, and hosting providers, which resulted in over 95,000 illegal gambling websites being taken down in 2024 alone, illustrate the power of this approach[8]. Denmark’s 2024 partnership with Twitch to restrict unlicensed gambling content on the streaming platform further demonstrates that enforcement can extend beyond traditional domains into the digital ecosystems where illegal operators recruit their audience.

The third practice, Worthy Rivals, encourages players to study what others do better, not as competitors to defeat but as sources of continuous improvement. In the regulatory context, this means that jurisdictions should actively examine and learn from each other’s approaches. Rather than viewing other regulators as irrelevant or as competition, an infinite game mindset treats their successes and failures as essential intelligence for refining one’s own strategy.

The fourth practice, Existential Flexibility, is perhaps the most critical in this context. When one enforcement tool fails, the infinite game player does not abandon the cause but pivots to a different strategy. Germany’s experience in 2024 offers a compelling example: after its Federal Administrative Court ruled that ISP blocking of illegal gambling websites was unlawful, the German gambling regulator did not accept defeat. Instead, it pivoted to host-based blocking, targeting hosting service providers directly, and partnered with Google to ensure that only licensed operators could advertise through Google Ads in Germany[9]. This adaptability, the refusal to be defeated by a single setback, is the hallmark of an infinite game player.

Equally important is the concept of channelisation, or making the regulated market a more attractive alternative to the black market. A 2024 report by Regulus Partners[10] introduced a useful analytical tool, quantifying the “frictions” that drive players toward illegal operators: product frictions (restricted betting options, low return-to-player rates), price frictions (high effective tax rates reflected in worse odds), and customer choice frictions (limited payment methods, slow payouts, restrictive account management). When these frictions accumulate, even well-intentioned regulation can inadvertently create what game theory would describe as incentive-compatible conditions for choosing illegal alternatives. Reducing these frictions, without compromising player protection, represents the core challenge for regulators who wish to play the infinite game.

Finally, the Courage to Lead demands that regulators resist the temptation to pursue politically visible but strategically ineffective measures. Denmark’s introduction of a statutory gambling levy in April 2025, requiring all licensed operators to fund research, education, and treatment related to gambling harm, illustrates this courage. Rather than treating harm reduction as a regulatory burden imposed from outside, it embeds it into the business model itself, aligning the interests of operators with those of the regulator and the public. This kind of structural innovation is far more aligned with an infinite game mindset than reactive enforcement measures designed primarily to demonstrate political will.

Conclusion

Empirical evidence drawn from the practical application of regulatory and enforcement measures across European gambling markets shows that, while the expansion of illegal gambling has in some cases been partially contained, the existing frameworks have largely failed to deliver a strategically and consistently effective response.

Considering these findings, the evidence supports a fundamental shift in regulatory perspective rather than merely adding more enforcement tools. The illegal gambling market increasingly exhibits characteristics of an ongoing, adaptive system, capable of reallocating resources and rapidly adjusting to targeted interventions. As such, addressing this trend as a finite conflict with the objective of complete eradication appears inconsistent with its reality. A more sustainable approach would treat the black market as an infinite game, in which the primary objective is not absolute elimination but the perpetuation of its existence until they decide, on their own, to withdraw.

Ultimately, the available data indicate that sustained pressure through narrowly focused, strategically aligned interventions offers a more realistic pathway to reducing the impact of illegal casino markets than attempts at comprehensive suppression. The effectiveness of this approach lies not in achieving a definitive endpoint, but in maintaining regulatory resilience until unlicensed operators are progressively deprived of the financial, technological, and organisational resources necessary to continue operating at scale.

The persistent focus on controlling the behaviour of illegal operators reflects a finite, reactive approach that consumes legal resources, producing only a measurable reduction in the problem.

What the evidence does support is a regulatory posture built on adaptability, collaboration, and strategic patience. This means investing in multi-stakeholder coalitions that extend enforcement beyond the regulator’s own walls, pursuing channelization by making regulated markets genuinely competitive rather than merely permissible, and embracing the flexibility to pivot when legal or technological conditions change. In the infinite game, the measure of success is not whether the black market has been eliminated, but whether the regulated ecosystem has become resilient enough to outlast it.

Luís Portela de Carvalho is a co-managing partner at Lektou in Portugal and a member of IMGL

[1] European Casino Association, ‘The European Casino Association releases a Yield Sec report on illegal online gambling, uncovering annual loss of €20 billion of EU tax money’ (European Casino Association, 20 November 2025) https://www.europeancasinoassociation.org/news/press-releases/the-european-casino-association-releases-a-yield-sec-report-on-illegal-online-gambling-uncovering-annual-loss-of-eur20-billion-of-eu-tax-money?trk=article-ssr-frontend-pulse_little-text-block

[2] Moonshots Podcast, ‘Episode 57 – Simon Sinek 5. The Infinite Game. Transcript — Learning Out Loud’ (Podcast, 2025) https://www.moonshots.io/page57-simon-sinek-infinite-game-transcript

[3] Simon Sinek, The Infinite Game (Portfolio/Penguin, 2019) https://simonsinek.com/books/the-infinite-game/

[4] David Cook, ‘Spain’s Supreme Court Strikes Down Gambling Advertising Restrictions’ (iGaming Business, 10 April 2024) Spain Supreme Court scraps number of gambling ad restrictions

[5] Greece blocks 11,000 illegal gambling sites, plans tougher enforcement (Yogonet International, 18 December 2025) https://www.yogonet.com/international/news/2025/12/18/116890-greece-blocks-11-000-illegal-gambling-sites-plans-tougher-enforcement

[6] NEXT.io, Blask x NEXT.io: Which enforcement approaches actually curb offshore gambling? (NEXT.io, 24 December 2025) https://next.io/news/features/blask-which-enforcement-approaches-curb-offshore-gambling/

[7] Nicole Macedo, ‘Europe’s Illegal Gambling Market: What’s the Solution?’ (iGaming Business, 14 January 2025) https://igamingbusiness.com/offshore-gaming/europes-illegal-gambling-market-whats-the-solution/

[8] On Germany’s payment blocking coalition: see iGaming Express, ‘Germany Steps Up Enforcement in Online Gambling Regulation’ (2024) https://igamingexpress.com/germany-steps-up-enforcement-in-online-gambling-regulation/ On the UK Gambling Commission’s 2024 enforcement results: see UK Gambling Commission, Summary of Disruption Activity: Disruption of Illegal Online Gambling (2024–25) https://www.gamblingcommission.gov.uk/report/illegal-online-gambling-disruption-of-illegal-online-gambling/summary-of-disruption-activity-disruption-of-illegal-online-gambling

[9] On the German Federal Administrative Court’s ruling on ISP blocking and the GGL’s pivot to host-based blocking and Google Ads partnerships: see Gaming Eminence, ‘The Block That Didn’t Stick: Inside Germany’s Landmark ISP Ruling on Gambling’ (2024) https://www.gamingeminence.com/post/the-block-that-didn-t-stick-inside-germanys-landmark-ispr-ruling-on-gambling; iGaming Business, ‘German Gambling Regulator Claims Progress in Illegal Market Battle’ (2024) https://igamingbusiness.com/legal-compliance/licensing/german-gambling-regulator-claims-progress-in-illegal-market-battle/

[10] https://www.entaingroup.com/media/zh2n0i0s/regulus-report-2024-black-market-gambling.pdf