The issue of gambling legalization remains one of the most controversial in modern society. Many countries have spent years balancing between an outright ban and strict regulation. However, the experience of states that have chosen legalization shows that there are strong arguments in favor of this decision.

Legalization and proper regulation of gambling make the market transparent, turn "gray" turnover into taxes, create a stable source of funding for sports, and give the state the tools to protect players. On 3S.INFO, we have compiled all the arguments with country‑by‑country data.

Gambling Taxes: Turning the Gray Market into Budget Revenue

The gray market does not bring the state a single penny. Legal casinos and bookmakers can become a significant source of revenue:

  • Funds go to social programs, healthcare, and education.
  • Examples from the UK, Malta, and the state of Nevada (USA) show billions in contributions from regulated gambling.
  • Additional tax revenue comes from employee salaries within the industry.

When gambling is banned or semi‑legal, money flows to offshore operators and criminal schemes, and the state receives nothing. Legalization makes it possible to:

  • Collect tax on Gross Gaming Revenue (GGR);
  • Monitor turnover and shut down illegal operators;
  • Direct part of the revenue toward social programs and sports.

What this shows:

  • In the United Kingdom, the betting and gaming sector consistently contributes around £3.5–3.8 billion to the budget each year.
  • In Italy and Australia, gambling taxes amount to billions of euros or dollars annually, and this is already an embedded part of budget revenues.

For countries with large illegal online markets, legalization is a way to bring trillions in turnover out of the shadows and back into the taxable base.

Funding Sports and Public Programs Through iGaming

Many jurisdictions channel a share of gambling tax revenue directly into sports, healthcare, and programs to combat gambling addiction.

How It Works in Practice

  • Australia (states and territories). A point‑of‑consumption tax (POCT) is levied on wagering at rates of 15–25% of net revenue. A significant portion of these taxes is directed toward funding the racing industry, other sports, and gambling harm reduction programs as well as market regulation.
  • Australia, state of Victoria (2024–2025). Players in Victoria lost over 7.385 billion AUD during the year; the state budget received more than 2.469 billion AUD in taxes and levies across various products. From wagering, over 362 million AUD was collected for the state (Tabcorp + other bookmakers), with part of these funds going into the consolidated fund, which finances community programs, including sports and regulation.
  • Europe broadly. In many EU countries, revenue from licensed operators (GGR taxes, license fees, and contributions) is partially allocated to sports federations or national sports funds. This reduces the reliance of sports on direct budget subsidies.

This model creates a sustainable source of funding: the more players move from the illegal segment to the legal one, the more money flows into sports and social programs.

Player Protection: The Benefits of Regulation

Underground gambling is not controlled by the state: there are no guarantees of fair play, no protection of personal data, and no mechanisms for fund recovery. In the legal framework, players receive:

  • Transparent rules and certification of gaming software.
  • Self‑limitation and Responsible Gambling programs.
  • The ability to appeal to a regulatory body in case of violations.

Illegal operators often use psychological pressure and hidden algorithms. Legalization makes it possible to introduce ethical standards and oversight.

Legalization is not about "letting everyone gamble." It is about creating a framework in which players are protected and operators are required to comply with RG standards.

Key Elements of Protection in a Regulated Market

  • KYC and Age Verification. Mandatory identity verification, age checks, and a ban on underage gambling are basic licensing requirements in all the countries mentioned.
  • Responsible Gambling Tools. Deposit and betting limits, loss limits, temporary account suspension, and self‑exclusion. Several countries maintain a single register of self‑excluded players, which operators are required to check and block those individuals from accessing all licensed sites.
  • Fairness Control and Anti‑Fraud. State‑run or independent regulators test RNGs, certify software, monitor payouts, and prevent fraudulent schemes.
  • Addiction Prevention and Funding for Assistance. A portion of taxes and levies is earmarked for problem gambling prevention and treatment programs, helplines, and NPOs.

In the illegal segment, none of this exists: no fairness guarantees, no limits or self‑exclusion mechanisms, no way to protect vulnerable players or track money laundering.

Controlling Casino & Bookmaker Advertising and Access

Under a ban, advertising for illegal online casinos flourishes across the internet, attracting vulnerable groups. With legalization, the state can:

  • Restrict when and where gambling ads are shown.
  • Prohibit targeting of minors.
  • Require mandatory warnings about the harms of gambling.

Why Legalizing iGaming Is Better Than Prohibiting It

  • Taxes and the Economy. Legal gambling generates billions in tax revenue: $15.9 billion in the US in 2024, billions of euros in Italy, and hundreds of millions in individual Australian states. These funds can be directed toward sports, healthcare, infrastructure, and market regulation itself.
  • Funding for Sports. Sports and leagues receive stable income through taxes, earmarked contributions, and sponsorship deals with licensed operators.
  • Player Protection and the Public Interest. Regulation provides tools for control: KYC, limits, self‑exclusion, Responsible Gambling standards, and AML. The state can genuinely combat addiction and fraud, rather than simply "looking away" while the gray market grows.

Therefore, at the policy level, the question is increasingly framed not as "should gambling be allowed or banned," but rather as "which model of legalization and regulation should be chosen to best protect players and society, without handing the market over to illegal operators." 

The Downside: Risks You Can't Ignore

Legalization does not eliminate the problem of gambling addiction. Therefore, it must be accompanied by:

  • Mandatory funding for addiction help centers.
  • A self‑exclusion system (players can voluntarily add themselves to a "blacklist" of all legal gambling venues).
  • Limits on maximum bets and frequency of play.

A complete ban on gambling in the internet age is naive. The market simply goes underground, becoming more dangerous. Legalization, on the other hand, turns gambling from a problem into a controlled economic sector, protects consumers, and directs revenue toward the public good. The key principles are strict regulation, addiction prevention, and certain punishment for illegal operators.

The author is not calling for the reckless expansion of gambling. This article presents arguments within the broader debate about a sensible legal alternative to prohibition.