The 2026 World Cup is coming, and the global #sports betting market will experience an unprecedented explosion. According to industry analysis, the 2026 FIFA World Cup is expected to drive the global sports betting amount to about $35 billion, far exceeding previous events.
This World Cup benefits from the expansion format of 48 teams bringing more matches (about 40 additional games) and the participation of 500 million potential viewers worldwide. On the eve of this grand event, the European sports betting industry is facing multiple pressures: high taxes, advertising restrictions, and excessive regulation leading to reduced profit margins for operators.
In contrast, although the Southeast Asian market is fragmented and largely a gray area, it shows high growth potential and has become the main market for operator capital migration.
🇪🇺 European market taxes lead to the shrinkage of the legal market
Europe, as the birthplace of sports betting, once led the global market development, but in recent years it has been severely squeezed by regulation. Industry experts generally believe that the highest taxes and advertising restrictions are the biggest obstacles to the development of legal sports betting in Europe. iGaming consultant Henk Wolff pointed out that when the tax rate exceeds the 30% threshold, gray activities will appear in large numbers, as legal operators cannot compete with offshore platforms in terms of odds and bonuses.
The Dutch market is a typical case. The Netherlands was originally open to online gambling, and several operators obtained licenses in 2021. 🔴 However, from 2025, the Dutch gambling tax will be raised from 30.5% to 34.2%, and further to 37.8% in 2026, resulting in an effective tax rate close to 50% (calculated based on total gambling revenue GGR).
🔴 H2 Gambling Capital data shows that the total legal gambling revenue in the Netherlands will drop from 353 million euros in 2024 to 286 million euros in 2025, and is expected to further slightly decrease to 285 million euros in 2026; while offshore gambling revenue will steadily increase from 123 million euros in 2023 to an estimated 192 million euros in 2026.
LiveScore Bet CEO Sam Sadi recalled that the company launched in the Netherlands in October 2021, promoting products using the local million-user base, but strict reporting requirements and high tax rates forced it to exit the market in November 2024. He said: "The market channelization rate dropped from the initial 80-90% to about 60%, and high-value customers all turned to overseas platforms."
➡️ In 2025, the legal online gambling GGR in the Netherlands decreased by 18.5% year-on-year, and the gray market accounted for 53% of betting expenditures.
The UK market will significantly increase the gambling tax (especially related to online casinos) to 40% from April 1, 2026, and the sports betting tax will also rise to 25% from 2027. Entain (Ladbrokes' parent company) has already provided a 488 million pound impairment, warning that this policy will "open the door to the gray market."
🔴 Industry forecasts that 25-30% of the UK market share will be lost to overseas in the next two years, similar to the Netherlands losing about 30% and Germany losing about 80%.
Sweden's high tax rate in 2024 (about 22%) also led to a surge in the offshore market, and the channelization rate dropped significantly. Although the tax rate was later reduced to a lower level, the damage to users could not be recovered. Germany also faces similar dilemmas, with product restrictions (such as banning certain types of football betting) and advertising controls pushing up the gray market share.
In addition to taxes, advertising restrictions further worsen the competitive environment. In Italy, print advertising is completely banned, and broadcast advertising is only allowed after 11 pm; in Belgium, public advertising is banned; the English Premier League is about to ban gambling chest sponsorships.
These issues collectively lead to accelerated market consolidation. Only the largest operators (such as Flutter, Entain, bet365) can absorb costs, and small compliant brands struggle to survive.
🌏 Southeast Asia's gray market welcomes significant growth
In stark contrast to Europe, the Southeast Asian sports betting market shows a high growth trend. Although most countries still classify online gambling as illegal or strictly restricted, the gray/offshore market is thriving.
🔴 IMARC Group data shows that the Southeast Asian sports betting market will reach $3.9 billion in 2025, expected to grow to $8.6 billion by 2034, with a CAGR of 8.93%.
The Philippines is a regional highlight, with the iGaming hub under PAGCOR regulation reaching about $7.16 billion GGR in 2024, and expected to be $7.8-8.3 billion in 2025. Although the 2025 Anti-POGO Act shut down some offshore operators, the local market still has great appeal. Vietnam, Thailand, Indonesia, and other countries, although explicitly banning online gambling, have fragmented enforcement, allowing offshore platforms to develop through VPNs or local agents.
The entire Southeast Asian population exceeds 670 million, with high digital adoption rates, and football, especially the English Premier League, UEFA Champions League, and World Cup, are major betting categories. This year's World Cup will further amplify the market, so European capital is also migrating here, with LiveScore's Sadi mentioning that the group has shifted its marketing budget to African markets such as South Africa and Nigeria, which are similar to Southeast Asia, like Flutter and other giants also shifting resources from high-tax European markets to Asian growth points.
🔴 Unlike Europe, Southeast Asian offshore operators can achieve profit margins of up to 90%, far higher than the 30-35% of European legal platforms.
The 2026 World Cup will test the adaptability of operators, and in the Southeast Asian market, more new users will be captured (🔴 global reports show that 62% of respondents plan to bet on the World Cup, 29% for the first time).
Of course, the World Cup can only provide a short-term explosion, and long-term success still depends on the platform's operation. For many operators, the year of the 2026 event may be a key point for strategic transformation.
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