The UK Gambling Commission’s VPN Challenge: Measurement Uncertainty in a Borderless Digital Market
The UK Gambling Commission published its latest update on illegal gambling trends in April. It did not warn of a surge in black-market activity. Instead, it flagged that rising VPN adoption is making the black market harder to measure.
The regulator has built a 30% VPN adjustment into its methodology. Following implementation of the Online Safety Act, it revised assumptions using data from Ofcom and Similarweb. The outcome was greater uncertainty about the true scale of illegal gambling engagement.
As someone who has spent decades observing the evolution of gaming regulation, I see this as another inflection point where technology outpaces enforcement frameworks. Licensed operators and regulators must navigate visibility gaps without undermining legitimate privacy tools or over-reacting to measurement friction.
Harder to Measure
The Commission relies on traffic estimates and trend analysis rather than precise measures of illegal gambling activity. It repeatedly stresses that no single dataset can fully capture black-market behaviour.
VPNs complicate this picture. They mask location, encrypt traffic and allow users to bypass geo-restrictions.
“The significant use of VPNs mean that web traffic data is an unreliable way to assess the scale of the black market,” says Melanie Ellis, partner at Northbridge Law. “The Commission will need to continue to use other indicators such as consumer research and information from the licensed industry.”
Ellis adds that VPN use reduces the effectiveness of geo-blocking. This creates operational challenges even for offshore operators attempting to comply.
Elizabeth Cronan, vice president of government affairs at fraud-prevention technology company GeoComply, argues that VPNs do not fundamentally undermine regulated markets. “VPNs and other location-spoofing tools are widely available, but that does not mean they undermine regulated online gambling markets.” “Modern geolocation technology is specifically designed to detect VPNs, proxies, remote desktop tools and other forms of location manipulation.”
She adds that the core issue lies elsewhere: “The bigger issue is that illegal operators often choose not to deploy these controls.”
James Baker, platform power and free expression programme manager at Open Rights Group, cautions against misinterpreting reduced visibility. “Reduced visibility should not automatically be treated as evidence that illegal gambling has increased.”
Diverging Views on Enforcement Effectiveness
Industry perspectives split on whether VPNs represent a genuine regulatory loophole or a manageable compliance layer.
Mike Venner, director at Advanced Compliance Technology, sees VPN use as exposing real weaknesses in enforcement systems. “The issue remains consistent: without effective enforcement technology, legislation is increasingly easy to circumvent. Basic geolocation checks are no longer sufficient in an environment where location spoofing tools are so widely accessed.”
Bethan Lloyd, partner at Wiggin, similarly argues that VPNs and related tools highlight the limits of geo-blocking. “VPN providers constantly adapt their technology – such as rotating IP addresses, obfuscating traffic to mimic standard HTTPS, and leveraging residential IPs – faster than detection methods can keep pace.”
Cronan takes a more compliance-focused view. “The technology exists and is already widely used successfully in highly regulated markets such as the United States.” “Licensed operators are required to detect and verify a customer’s true location before accepting a wager, and regulators routinely audit and test those controls.”
From the operator standpoint, the competitive implications are clear. Licensed platforms invest in robust geolocation and VPN detection while unlicensed sites often skip these controls entirely. That asymmetry can erode market share even when overall black-market size remains uncertain.
Are VPNs a Red Herring?
Ismail Vali, president of Gaming Compliance International, takes a sceptical view of the debate itself. “VPN use has always been a red herring.”
Vali emphasises practical limitations that reduce VPN relevance in gambling environments. “Latency means delay. If you’re live sports betting, using a live dealer casino, playing slots with community features, or taking part in games such as poker, that delay becomes a major issue.”
He argues that users often find the experience degraded. “There is effectively no reliable way to use a VPN with modern gambling products and have a satisfactory experience.”
Crucially, Vali disputes that VPNs are central to black-market access at all. “The key point is that VPN users have always represented a tiny proportion of the overall audience. In virtually every country, users can access unlicensed gambling operators without needing a VPN.”
That points to the real enforcement gap: the continued availability of offshore sites rather than circumvention tools themselves.
Risk of Over-Regulation and Unintended Consequences
Any discussion of limiting VPNs carries risk. These are dual-use technologies essential for privacy and cybersecurity. Restricting them could drive users toward more dangerous tools such as Tor or unregulated proxies.
Cronan warns against unintended consequences of regulation. A proposed consultation from the Department for Science, Innovation and Technology would require VPN providers to age-verify users, but she argues this “will likely be unproductive, as it will drive people away from compliant VPNs and towards more dangerous forms of location obfuscation technology, such as Tor and unregulated proxies with dubious data security and privacy practices.”
Venner connects the issue to broader systemic enforcement challenges that extend beyond gambling into the Online Safety Act itself. “Rising VPN use highlights the same enforcement challenges that we have previously raised with the UK government in the context of the adult content and the Online Safety Act.”
He calls for a more advanced and layered approach. “To protect bettors and uphold market integrity, regulators and operators must employ real-time, multi-layered solutions that combine location, network, device, identity and behavioural intelligence.”
Lloyd adds that rising taxes may further weaken licensed operators’ competitiveness, potentially pushing users toward unlicensed sites. Ultimately, she notes, it is not the job of licensed operators to police the black market.
The Bottom Line
VPN adoption complicates measurement and enforcement but is neither the root cause of illegal gambling nor a reason to abandon data-driven oversight. The UK Gambling Commission’s revised assumptions reflect a structural shift: geographic enforcement is becoming harder in a borderless internet. Operators must therefore treat multi-layered verification and consumer research as core operational inputs rather than optional compliance costs. What matters next is whether regulators and licensed platforms can close the real gap – the easy availability of offshore sites – without compromising the privacy tools that millions of users rely on for legitimate purposes. Client-partners navigating UK and similar regulated markets should monitor how the Commission integrates Ofcom and Similarweb data in future updates, because sustained uncertainty will influence both investment decisions and product strategy.
