In the latest illegal gambling trend report released by the UK Gambling Commission in April this year, an seemingly inconspicuous variable became the focus under the spotlight—VPN. The GC is not warning about a surge in the scale of black market gambling, but rather admitting a more troublesome fact: the prevalence of VPNs has made the scale of the black market increasingly difficult to measure. As the UK's "Online Safety Act" takes effect, the use of VPNs continues to climb, and more and more online activities may have already escaped the scope of traditional traffic analysis. The debate around VPNs is also heating up: does it really open a backdoor for illegal gambling, or is it being exaggerated as a scapegoat?
Thirty percent of traffic has "gone incognito," forcing a revision of methodologies
The GC does not rely on precise data to measure illegal gambling activities, but rather on traffic estimates and trend analysis. The problem is that VPNs are gradually causing this methodology to become inaccurate. The GC has already built a 30% VPN adjustment factor into its methodology, but admits that after July 2025, a larger proportion of web traffic may be hidden. To address this, the GC has introduced VPN usage data from Ofcom and Similarweb to revise assumptions—the result is not a clearer picture, but greater uncertainty.
Melanie Ellis, a partner at Northbridge Law, puts it bluntly: the widespread use of VPNs means that web traffic data is no longer a reliable way to assess the scale of the black market, and the GC must continue to rely on consumer surveys and licensed industry information among other indicators. She also points out that VPNs reduce the actual effectiveness of geographic blocks, even for offshore operators who want to comply, thus facing operational difficulties.
However, Elizabeth Cronan, Vice President of Government Affairs at the anti-fraud technology company GeoComply, disagrees. She believes that VPNs have not fundamentally shaken the regulated market—modern geolocation technology itself is designed to detect VPNs, proxy servers, remote desktop tools, and other location disguise methods. The real problem is that illegal operators simply do not deploy these controls.
"VPNs are just a smokescreen," who is telling the truth?
The industry's attitude towards VPNs varies so widely that it's almost a case of everyone speaking their own language.
Ismail Vali, president of Gaming Compliance International, represents the "smokescreen faction," and his view is incisive: "VPNs have always been used as an excuse to shift focus." He gives a very grounded explanation from the user experience perspective: latency is the killer—whether playing live sports betting, live dealer casinos, community slot machines, or poker, latency is a fatal flaw—betting windows will close, live broadcasts will be delayed, and compliance checks introduce additional friction. In his own words: "Trying to have a smooth experience with modern gambling products paired with a VPN is basically impossible." More importantly, Vali believes that VPN users are a tiny minority in the overall audience, and in most countries, users do not need a VPN to access unlicensed gambling platforms. In his view, the real enforcement loophole is not the evasion tools, but the offshore websites themselves being continuously accessible.
But Mike Venner, Director of Advanced Compliance Technology, holds a completely opposite stance. He believes that VPNs expose the real shortcomings of the enforcement system: basic geographic location checks are no longer sufficient in an era where location disguise tools are readily available, without effective enforcement technology, legislation will only become easier to circumvent. Bethan Lloyd, a partner at Wiggin law firm, also added that VPN providers rotate IPs, disguise traffic to simulate HTTPS, and use residential IPs, with iteration speeds always faster than detection methods.
An Online Safety Act, unexpectedly driving up VPN demand
The spill-over effect of this debate has already exceeded the gambling industry itself. After the implementation of the UK's "Online Safety Act" last year, the demand for VPNs rose sharply—both minors and adults use it to bypass mandatory age verification. According to Cronan, this "induced demand" has made VPNs more popular in the UK, also increasing the likelihood of accessing offshore gambling platforms through VPNs.
Long-term readers of the PASA official website may have noticed that the UK has been increasing its efforts in gambling advertising and content regulation. But the issue of VPNs has exposed a deeper paradox: the stricter the regulation, the more prevalent the evasion tools, and the more disadvantaged the compliant operators become. Ellis points out the key to this vicious cycle—the continuously rising gambling tax rates may further weaken the competitiveness of licensed operators, pushing more users towards unlicensed sites. This is probably the last thing the regulators want to see as a chain reaction.
Venner elevates the issue to a higher level, believing that VPNs expose not just the shortcomings of gambling enforcement, but the general malaise of the entire UK online regulatory system—including compliance with the "Online Safety Act" and adult content, all facing the same problems.
What's the way out? Multi-layer verification or clamp down on VPNs?
Faced with the uncertainties brought by VPNs, the industry consensus on solutions is quite limited.
Cronan advocates following the American model, taking a strict compliance route: licensed operators must detect and verify the customer's real location before accepting bets, while regulatory agencies routinely audit and test control measures. She also warns that the UK's Department of Science, Innovation, and Technology's proposal to require VPN providers to perform age verification on users is "likely to backfire"—this would push users towards more dangerous location disguise schemes, such as Tor and unregulated proxy servers, whose data security and privacy practices are even less controllable.
Venner calls for the adoption of a more complex layered compliance system: 1. Integrating location, network, device, identity, and behavioral intelligence; 2. Conducting real-time multi-layer verification; 3. Otherwise, geographic compliance challenges will only become more acute.
James Baker of the digital rights organization Open Rights Group reminds policymakers not to overinterpret: "A decrease in visibility should not be automatically equated with an increase in illegal gambling." His advice is to improve measurement methods and combine multiple sources of evidence, rather than assuming things have worsened because they can no longer be measured. The stance of the UK communications regulator Ofcom is more cautious: VPN is a legal service that can be promoted and used in the UK market, whether to restrict VPNs should be decided by the government, not within the framework of the "Online Safety Act."
Ultimately, VPNs are neither the sole culprit nor an irrelevant background noise. Their biggest impact is making the three links of measurement, enforcement, and interpretation simultaneously more difficult. For the GC, the real challenge is not VPNs themselves, but how to rebuild a reliable regulatory logic in a digital environment where "visibility is no longer guaranteed."
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel: https://t.me/pasa_news
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