A new regional alliance is forcing a reckoning in southeastern Europe’s gambling sector. With illegal operators capturing an estimated 89% of online gaming revenue across the Balkans, legal operators have quietly abandoned their isolated approaches in favour of collective action. The Balkan Gaming Federation, launched in March with members from seven countries, represents the industry’s most ambitious attempt yet to reshape how the region addresses regulatory policy and market integrity.

A Crisis of Confidence and Channelisation

The statistical reality is stark. According to Gaming Compliance International, channelisation in the Balkans stood at just 11% in 2025 across major markets including Serbia, Montenegro, Croatia, Bulgaria, Romania and Slovenia. That figure represents a systemic failure of regulation, enforcement and market design. While legal operators invest heavily in compliance infrastructure, player protection systems and anti-money laundering controls, their unlicensed competitors operate with impunity. No regulator touches them. They contribute nothing to state coffers.

This disparity has left legitimate businesses caught in a vicious cycle. Across the region, governments have responded to illegal market growth with increasingly punitive measures: advertising bans, steep tax increases, restrictive licensing regimes and advertising blackouts. Romania’s situation has become the most acute, with new local authorisation requirements effectively ceding control to municipal councils. Bulgaria and Croatia have followed suit, layering restrictions that, counterintuitively, appear to be driving more players toward unregulated alternatives.

The Paradox of Restrictive Regulation

Miloš Lalević, vice president of Montenegro’s gaming association and a former government deputy minister, articulates the central tension facing policymakers across the region. “When regulation becomes excessively restrictive, the outcome is often the opposite of what policymakers intend,” he explains. “Players do not disappear from the market; they simply migrate to unlicensed operators.”

This observation sits at the heart of the BGF’s strategic mission. The federation, headquartered in Croatia and representing trade associations across Serbia, Bulgaria, Croatia, Romania, Montenegro, Bosnia and Herzegovina and North Macedonia, aims to reframe how regulators perceive the regulated industry. Rather than viewing licensed operators as part of the problem, Lalević and his counterparts want governments to recognise them as essential infrastructure in the fight against illegal gambling.

Licensed operators invest substantially in systems and processes that unlicensed competitors avoid entirely: consumer protection frameworks, responsible gaming programmes, technological innovation in player identification and sophisticated anti-money laundering mechanisms. These protections exist precisely because legitimate businesses operate within jurisdictional boundaries and answer to regulatory bodies.

Building Dialogue Rather Than Confrontation

The BGF’s immediate agenda focuses on fostering genuine dialogue between industry and regulators. The federation is organising a major roundtable bringing together government representatives, leading operators, independent experts and compliance specialists. The goal is not lobbying in the traditional sense, but rather creating space for collaborative problem-solving on regulation and market integrity.

This approach acknowledges a fundamental reality: outdated regulatory frameworks and inconsistent enforcement across the region play directly into the hands of illegal operators. Without coordinated action and thoughtful policy design, the cycle of restrictive regulation driving players toward the black market will only accelerate.

As the BGF prepares to elect its first president this autumn, its success will hinge on whether it can convince policymakers that a thriving legal market, properly regulated and proportionately taxed, ultimately serves public interest far better than an ever-expanding shadow sector beyond government reach.