In Southeast Europe, legal gambling operators are facing unprecedented dual pressures—on one side, the soaring compliance costs due to tightening regulations and increasing tax burdens, and on the other, the market share being continuously eroded by increasingly savvy and cross-border penetrating illegal gambling platforms. In March this year, industry associations from seven Balkan countries chose an unprecedented path: no longer fighting alone, but forming a united front. The Balkan Gambling Federation was thus established, covering operators and supplier representatives from Serbia, Bulgaria, Croatia, Romania, Montenegro, Bosnia and Herzegovina, and North Macedonia. The PASA official website notes that the core demands of this alliance can be condensed into two points—combating the illegal market and promoting proportional regulation, which, in the eyes of the founders, are two sides of the same coin.
From acting independently to forming a seven-nation alliance
The work of the federation has already started. Earlier this year, after signing a memorandum of cooperation in Belgrade, BGF chose Croatia as its registration location, with the election of its first president scheduled to be completed this autumn. Meanwhile, a roundtable meeting gathering regulatory bodies, leading enterprises, independent experts, and government representatives from Balkan countries is being prepared, intending to establish an unprecedented channel of dialogue between regulators and the industry.
Milos Ralevic, Vice President of the Montenegrin Gambling Association GPIS and former Deputy Minister of Sports and Culture and member of Montenegro's EU accession negotiation team, candidly expressed the industry's collective sentiment: "Licensed operators should not be seen as part of the problem—they should be recognized as part of the solution. These enterprises are entities that invest in compliance systems, responsible gambling programs, consumer protection, technological innovation, and anti-money laundering systems. If the government truly wants to effectively combat illegal gambling, it needs a strong and competitive regulated market."
Romania tightens, Bulgaria bans ads, Croatia increases taxes
Looking back at the regulatory trajectory of Balkan gambling in recent years, it's not hard to understand why the industry feels it has been treated as a "problem" rather than a "partner". This region, once seen as a "low-cost entry point" for European gambling, has in recent years introduced a series of stringent regulatory measures, leading to a spiraling increase in costs.
The situation in Romania is the most extreme. After tax increases and a ban on slot machines in small towns, a new round of venue licensing laws is leading the physical slot machine industry towards collapse—the new regulations essentially hand the fate of the entire industry over to local councils. Bulgaria's approach is similar: small town gambling bans, almost complete advertising bans, and an expansion of the self-exclusion system, all implemented in the past few years. Croatia is also undergoing major regulatory overhauls, strictly controlling advertising, player identification, and self-exclusion, while increasing taxes and license fees.
Ralevic sees the consequences of this trend clearly: "I am concerned that in many jurisdictions, there is still insufficient understanding of the actual consequences that some regulatory measures may have. When regulation becomes too strict, the results often run counter to the intentions of policymakers. Players will not disappear from the market—they just migrate to unlicensed operators that are beyond the reach of national regulatory bodies, tax authorities, and consumer protection frameworks. This is precisely why the growth of the black market has become the most pressing challenge for the industry."
Channelization rate only 11%: An unequal war
Numbers don't lie, but this time they tell a story the industry is reluctant to hear. According to data from Gaming Compliance International, the channelization rate for online gambling in the Balkan region is only 11% in 2025, meaning illegal gambling occupies 89% of the entire market. This statistic covers Serbia, Montenegro, Croatia, Bulgaria, Romania, and Slovenia, with Bosnia and Herzegovina and North Macedonia not included in the calculation.
Filip Jerlavić, Secretary-General of the Croatian Gambling Association HUPIS, is all too familiar with the threat of illegal gambling. For the past fifteen years, he has been committed to combating the black market with new enforcement strategies and methodologies at both European and local levels. Now that Croatia has become the registered location of the federation, Jerlavić believes HUPIS can help Balkan countries establish closer ties with Europe, while exporting key experiences in protecting the regulated market. "Croatian gambling industry has been involved in combating illegal gambling for over fifteen years, and in the past seven years, we have invested heavily in digital enforcement. Through cooperation with regulatory bodies, financial institutions, payment service providers, and international partners, significant progress has been made, but challenges are also rapidly evolving."
Jerlavić points out that the black market in the Balkans is becoming "increasingly sophisticated and organized". Through influencer promotions, affiliate networks, social media, and other digital communication tools, unlicensed operators have the ability to attract players to platforms that are completely outside the regulatory framework and offer almost no consumer protection. The strategy of the federation is to use the black market's own methods against it through cross-border sharing of information and tools.
From "taxpayer" to "strategic partner"
Ralevic's vision for the alliance goes beyond industry self-defense. He envisions establishing a "true partnership" between the public sector and the industry. In his view, although dialogues between the political realm and industry associations exist, these exchanges "often have more form than substance."
"Although consultations are underway, we still haven't seen enough substantial progress to establish a sustainable balance between the state's legitimate interests and the ability of licensed operators to provide services in a viable and competitive environment." He hopes that a unified voice covering the entire region can bring about change: "Licensed operators should not just be seen as taxpayers—although they are one of the most important contributors to the public budget—they should also be seen as strategic partners in advancing responsible gambling, consumer protection, anti-money laundering measures, and broader regulatory goals. The success of public policy in this field depends on a strong partnership between regulatory bodies and compliant operators."
The first year's three tests
The next few months will be a critical period to test the mettle of this new alliance. In addition to the regulatory roundtable meeting being prepared, BGF is also advancing closer cooperation with the European Gambling Industry Association EUROMAT, focusing on combating illegal gambling and safeguarding the interests of legal operators. In September this year, the two major associations from Europe and the Balkans will meet in Bucharest to reach a consensus on a common direction and closer industry coordination. In November, at the same time as the unveiling of the first president, the first Balkan Gambling Awards will also be held—this is the first time the regional gambling industry has collectively recognized local talent.
Jerlavić has quite practical expectations for the first year of the federation: "If after the first year, the federation is recognized as a serious regional partner—actively involved in combating illegal gambling, capable of uniting operators, suppliers, and industry stakeholders under a common goal—then it will be a very successful start."
PASA's official website believes that observing the Balkan region might benefit from extending the timeline. Montenegro plans to complete the EU accession process by 2028, at which time regulatory alignment in the fields of anti-money laundering and data protection will be on the agenda; input from the industry on emerging technologies such as AI also requires a collective voice from the industry side. Whether BGF can continuously realize the transformation formula of "regional unity → specific influence" between the seven countries, the Bucharest meeting and the election of the first president will be the first set of hard indicators. Ralevic's closing words are particularly apt: "Stronger institutional coordination is not an end in itself, it is a means to achieve more effective regulation, stronger consumer protection, more successful anti-black market efforts, and a healthier, more sustainable gambling industry in the Balkans and across Europe."
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This article is from "PASA-Global iGaming Leaders", a gambling industry news channel: https://t.me/pasa_news
Original deep channel for gambling: https://t.me/gamblingdeep
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PASA official website: https://www.pasa.news
