Australian advisory firm Vanguard Overwatch published a research paper on 7 September 2026 arguing that gambling regulators should be judged largely on how effectively they keep or bring activity into licensed markets. Titled The Price of Losing Control: Channelisation and Regulatory Failure in Online Gambling, the paper was written by Paul Newson, Vanguard Overwatch Principal and founder of the annual Regulating the Game conference in Sydney.
The paper contends channelization — not the binary question of whether to regulate at all — should be the central policy test governments apply. It argues the goal of any regulator cannot be to eliminate demand outright, but to minimise harm by regulating the legal market effectively while moving consumers away from illegal operators, a distinction Newson frames as the difference between credible oversight and symbolic prohibition.
Two Markets, Two Approaches
Australia continues to prohibit online casino and online poker, and has held firm on its ban on online in-play sports betting, a stance the paper says is coming under growing strain as offshore operators offer those exact products to Australian consumers outside any regulatory perimeter. New Zealand, by contrast, is moving to license online casino operations, with licences expected later in 2026 — a shift its Department of Internal Affairs has framed as channelling an existing offshore market into licensed supply rather than creating a new one, as covered in GIN’s look at how licensing and taxation design can pull betting activity back from a failed ban.
Newson’s paper cautions that New Zealand’s success will hinge on execution: licensing costs set too high could deter legitimate operators, overly restrictive product scope could leave the legal market uncompetitive, and asymmetric advertising rules could undercut its visibility — concerns echoed in GIN’s coverage of Australian wagering advertising restrictions and the balance between consumer protection and channelling.
Drivers of Illegal Supply
The paper argues illegal offshore sites attract gamblers through product access, pricing advantages and lower-friction participation the regulated market fails to match, complicated further by cryptocurrency payment rails and unregulated social-media promotion. It recommends real-time monitoring, firmer enforcement commitments, action against alternative payment channels, greater enforcement capacity, accountability across the commercial ecosystem supporting illegal operators, and regular reviews of what drives black-market activity and how product prohibitions contribute — a framework with parallels in GIN’s reporting on how higher operator costs can push players toward unlicensed markets.
The paper draws a comparison with Australia’s illicit tobacco market, where illicit product now accounts for 80% of consumption, arguing the same dynamic applies whenever legal supply becomes uncompetitive, over-frictional or unavailable. Taxation revenue, the paper notes, is a secondary benefit of an effective legal market, not its primary justification.
Source: ASGAM
Renata Kovacs has spent the better part of a decade following the regulatory shifts and licensing battles that define how gambling markets open, close, and evolve across Europe and beyond. She came up through the legal and compliance side of the industry before shifting her focus to journalism and analysis, giving her a perspective that sits closer to the operator room than the press box. Her coverage tends to cut through the noise and get straight to what a regulatory change actually means for the businesses and players involved.