Alexander Stevendahl believes regulation in some European markets has gone too far and is inadvertently fuelling black market growth.
The Videoslots CEO took part in a lively discussion on regulation on the main stage at iGaming NEXT Valletta 23.
On the topic of regulation, he said that regulators in some countries seem more interested in stopping gambling altogether, rather than in making it safe for consumers.
This no-nonsense approach to enforcement has left players with no alternative but to seek out less restrictive options offshore, according to Stevendahl.
He believes that crypto casinos are the biggest winners in this scenario, especially those that do not possess a local licence but are instead regulated by jurisdictions such as Curaçao.
“The fact is that crypto casinos are exploding,” said Stevendahl, who is an active browser on online casino user forums.
He said the hottest topic on forums right now is players asking how they can access crypto casinos – even in markets such as the UK, where channelisation rates are high.
“I haven’t seen this in the UK before, but the UK in the last few weeks has been insane,” he added. “People had been playing on the black markets, but now it’s just exploding.”
Stevendahl said players were using VPNs and creating fake profiles with other people’s documents to circumvent KYC rules and play outside of the regulated market.
“I really think it is a big challenge and it will be hard to stop,” he said. “Right now, we are on a really bad path.”
As well as the UK, Stevendahl pointed to Germany, where the German Sports Betting Association (DSWV) has sounded the alarm over the black market already this year.
In February, the DSWV conducted a market study and discovered a 65% increase in active illegal gambling and sports betting offers compared to the previous year, for example.
When asked if regulators were to blame for the current situation, Stevendahl said that “everyone involved” was behind the problem. He believes the demands placed on regulated operators are too high, which incentivises the industry to go grey in some areas.
Finally, Stevendahl said the marketing activity of the world’s biggest crypto casinos gives them an air of acceptability and drives trust, regardless of whether they are locally regulated.
“I also have a problem with the sponsorships of the crypto casinos,” he said. “If you look at the Argentina national team, they are sponsored by BC.GAME. They have Messi on their homepage which brings acceptance.
“Stake.com, which is both regulated and unregulated, sponsors these massive teams so people go out looking for them. Even at this conference, if we look around, it is mostly crypto,” he added.