17 September 2026
Across the globe, online casinos are paving the way for safer and more transparent gambling experiences through government licensing and oversight. But even with the benefits of a regulated industry, licensed operators still face significant competition from offshore and unregulated competitors who attract users with convenience and anonymity. This article examines the shifting landscape of the online casino market, where stronger regulation is driving growth but also forcing licensed operators to focus more attention on winning users with easy-to-access products and clear communications about their legal standing and customer protections.
Regulation Drives Growth, But the Market Remains Competitive
The online casino industry is growing rapidly, with 145 countries worldwide now regulating the activity, up from 100 just five years ago, according to PwC research. That growth has led to more competition and more options for players.
Ontario, which legalized online gaming in 2022, stands out as one of the most competitive regulated markets in North America. The province's iGaming regulator currently licenses about 49 operators running close to 84 individual gaming sites. That fierce competition has driven innovation but also geographic differences. For example, even though they are around the same size, Ontario has 49 operators while Quebec has 18.
Although regulation has not eliminated competition in any market, a PwC survey in 2021 determined that regulators' requirements and guidance have helped drive growth and innovation in the industry. In particular, the industry investment required for legalization resulted in a surge in responsible gaming tools such as deposit limits and self-exclusion programs. However, as the industry is still developing, it is difficult to measure the full impact of these safety improvements.
In the United States, seven states—New Jersey, Michigan, Pennsylvania, Delaware, West Virginia, Rhode Island, and Connecticut—have established fully regulated and legal online casino gambling industries. Last year, those seven states generated about eight billion dollars in gross gaming revenue, with New Jersey getting a 41.3% share of the massive $8.9 billion total.
While greater regulation and investment was touted to be a path to growth, some operators still face increased competition. In the last 12 months, user interest in licensed online gambling sites in the U.S. fell 12.8 percent year over year, while interest in offshore sites grew by 0.9%.
Leveraging License Fulfillment and Clear Communications: How Licensed Casinos Win User Trust
Despite the challenges of competition, licensed online casinos are attracting users with a combination of legal guarantees, player protections, and clearer communications about their regulatory status. When a casino site is licensed, it means that the operator has undergone a thorough vetting process and is subject to ongoing oversight. Players can check the licensing information in the site's footer, including the name and logo of the relevant state regulator.
Licensed casinos are also committed to responsible gaming. They typically offer a range of tools to help players manage their gambling, such as setting deposit limits, time-out periods, and self-exclusion options. Some states also require licensed operators to provide resources and support for problem gamblers.
The Numbers Behind the Market Split: Offshore Operators Still Dominate in Many Regions
But even as licensed online casinos offer better protections and clearer oversight, they are still losing ground to offshore operators in many markets. Across the United States, unlicensed brands now capture 77.6% of the market, according to Eilers & Krejcik data. And in the Netherlands, the share of offshore casino sites has increased from 11.9% in recent years to 14.3%. Offshore operators' growth rate was 48.2% over the last 12 months, which is much higher than the 19.6% increase seen by licensed operators.
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At the same time, the introduction of regulation is helping to drive the growth of online casinos. In the U.S., for example, 7 states have established fully regulated online casino industries, with 2023 generating $6 billion in revenue. While this growth is impressive, it represents a loss of around 2.6 percentage points in the market share held by licensed and regulated operators, as measured by industry analysts.
Competing Beyond Compliance: Where Licensed Operators Are Still Facing Pressure
Even when licensed casinos are operating in a market with clear regulations, they still face pressure from offshore and unlicensed competitors. Part of the challenge is visibility and accessibility. Offshore sites often have broader appeal, as they are accessible to users in multiple jurisdictions, regardless of local laws. They also tend to have more aggressive marketing strategies, making it easier for users to discover and access their sites.
Another challenge is that the value of a license is not always immediately apparent to users. While a license does mean that an operator has been vetted and is subject to ongoing oversight, it may not be clear to the average user what those protections include. That's why licensed casinos are increasingly looking to improve their communications around their legal status, regulator oversight, and player protections.
For instance, about 49 online casino sites have been licensed by operators within the Pennsylvania gambling industry, making them the largest in multiple categories of state revenue. However, the sites face stiff competition from offshore operators, who dominate much of the market.
Why Regulation Alone Is Not Guaranteeing Demand
Across various regions, even where regulation is driving growth in the online casino market, offshore and unlicensed competitors are still capturing a significant share of user demand. That's because regulation is just one factor in a user's decision about where to gamble.
Users also consider factors such as site usability, payout experience, and customer support. Sometimes even though a site is licensed, it might not offer the best or most convenient user experience. And in some cases, unlicensed sites may offer better payouts or customer support, making them a more attractive option for users.
Of course, this all depends on the jurisdiction. In the U.S., for example, licensed online casinos have a significant advantage in terms of visibility and accessibility, as they are promoted through state-run programs and have exclusive rights in their state.
But in other markets, the situation is more nuanced. In the Netherlands, for instance, while licensed casinos are capturing a growing share of the market, they are still losing ground to offshore operators, who offer a broader range of games and promotions.
