The online gambling industry is at a crossroads, with grey market operations growing riskier and regulated markets emerging as the sustainable path forward, according to a top eGaming Licensing Specialist with Manavia Limited.
Speaking at the 2025 ASEAN Gaming Summit in Manila, Frank Schuengel unpacked the shifting regulatory landscape, urging operators and stakeholders to prioritize compliance over shortcuts.
“Operating in grey markets is more dangerous than ever,” Schuengel asserted. “The future of this industry lies in regulated environments.” He explained that, while grey market licenses—often from jurisdictions with lax oversight, may seem cost-effective, they expose operators to escalating risks: legal crackdowns, reputational damage, and financial instability.
“Some still chase quick wins in places like the Philippines without grasping local rules or with total disregard for them, but that’s a gamble not worth taking,” he cautioned.
Despite these risks, Schuengel noted persistent player demand fueling grey market activity. “When governments get their local regulations catastrophically wrong, such as Germany, it creates a huge black market, as players go to providers that can deliver what they want.”
He contrasted this with regulated markets, where compliance costs are climbing but offer long-term stability. “The industry’s direction is clear – regulated markets are where growth will thrive.”
Schuengel highlighted another key trend: the increasing prominence of B2B licenses for software suppliers. “Countries are pushing to see that platform providers are regulated and can prove their legitimacy, and B2B licenses are gaining ground,” he said. These licenses ensure suppliers meet rigorous standards, giving operators confidence in their partners and bolstering industry credibility. “It’s a step toward a more accountable ecosystem,” he added.
New grey market licensing jurisdictions are also shaping the landscape, Schuengel observed. “Some markets offer licenses for as little as EUR25,000 ($27,000) with fast issuance,” he said, noting their appeal to smaller operators. However, he warned of their downside: “Minimal oversight often comes with these deals, leaving companies vulnerable.”
In contrast, he praised established hubs like Malta and the Isle of Man. “These Tier 1 jurisdictions remain the gold standard despite recent negative stories. The underlying fabric is one of compliance and integrity. Yet, even there, challenges loom.
“Compliance costs are up, and securing a license now demands more – extensive documentation, substance requirements, and more. In some cases, obtaining such a pre-regulated market license can easily cost GBP100,000 ($130,000) or more.”
Schuengel wrapped up with a focus on strategy. “The industry evolves fast, and those who invest in transparency and responsibility will lead,” he said. He urged operators to weigh licensing options carefully, favoring regulated frameworks over grey market risks. “Due diligence isn’t just a cost—it’s your foundation for success.”
