Illegal online gambling is rapidly emerging as a complex global challenge; one that extends far beyond what most people perceive as a regulated industry. Beneath the surface lies a vast, unregulated digital ecosystem that is costing governments billions in lost tax revenue, fueling financial crime, and increasing exposure to harm, particularly among vulnerable populations like minors.
What makes this issue especially difficult to address is its borderless nature. These platforms operate across jurisdictions, evolve quickly with technology, and are designed to evade traditional enforcement methods. As a result, governments and regulators are left grappling with a critical question: how can they effectively monitor, control, and enforce against something that operates at such scale and speed?
In this episode of Inside the Sweeps, host John Robb is joined by Perry Roach, CEO of Netsweeper, to explore how countries can regain visibility into online activity and take real-time action to combat illegal gambling at a national level.
John Robb: Welcome to today’s episode of Inside the Sweeps. We’re unpacking a growing and often underestimated global issue. Illegal online gambling. For many people, gambling feels like a regulated, controlled industry, but behind the scenes, there’s massive digital ecosystem operating outside of legal frameworks. One that’s costing governments billions in lost tax revenue, enabling financial crime, and increasing the exposure of vulnerable populations, including minors.
What makes this particularly challenging is that it’s not confined to one country or one platform. It’s borderless fast moving and constantly evolving alongside technology. So, the question becomes how do we even begin to monitor control and enforce. Again, something like this at scale to help us understand that today we have Perry Roach joining us. He’s the CEO of Netsweeper. Perry works very closely with governments around the world to help them gain visibility into online activity and enforce digital policies in real time.
Perry, it’s always great to have you here on the podcast.
Perry Roach: Thank you, John.
John Robb: Now let’s set the stage for our listeners. When we talk about illegal online gambling, what are we really dealing with in terms of scale? Is it a niche issue or is this something much bigger than most people realize?
Perry Roach: Thank you for having me, John. What we have to remember right out of the gate is the internet is not about your country. The internet is about the world as we know, and jurisdiction outside of your country is a challenge. As mentioned, illegal online gambling is a multi-billion-dollar global industry operating around the world with little or no regulation. The estimates are suggesting that over 50% of global online gambling activity may occur or does occur, unlicensed, illegal, and with zero player protection, zero taxes being paid. A significant portion of online. Unlicensed gambling is completely untracked, unmonitored, and there’s nothing being seen.
Governments lose substantial tax revenues. People get scammed and can’t get their money out of their accounts. And basically, there’s a lack of visibility at all areas of what these operators, these unlicensed, illegal operators are doing. What we’re seeing is two or three years ago it wasn’t an issue, but as mentioned, a significant portion has taken over.
And why is that? Because the unlicensed guys are saying, hey, governments aren’t going to do anything about it. Why should I become licensed? I’ll just continue to operate unlicensed. I don’t have to have lawyers to be regulated. I don’t have to follow rules, I don’t have to pay fees, I don’t have to pay taxes. And the scale is underestimated by all countries at this time.
John Robb: Now you’re saying it’s a really big issue and a lot of people go straight to the financial side of this, but because it’s so big when you zoom out the impact feels much broader. From your perspective, what are some of the downstream effects like socially, economically, even systemically that don’t always get enough attention?
Perry Roach: John, it is documented that online gambling feeds terrorism and organized crime. Drug running, all kinds of bad things on the internet, like child exploitation, human trafficking. At the end of the day, that is one of the biggest issues on the internet and what we’re seeing around the world is law enforcement is taking action now.
Now economically speaking, the money leaves the country with no benefit to the country. And when you talk about benefits to the country without any player protection, there’s addiction, financial harm impacting families. When you talk about youth gambling, it’s rampant. Underage exposure is widespread and very under recognized
Public services and infrastructure need tax revenues, and this is where it’s going. And politicians don’t even see it. It’s right underneath their nose. It’s not just a gambling issue; it’s a national digital safety issue or in some instances we see it as an economic crisis across the country.
John Robb: I’ve heard you talk about this economic crisis in certain places in Africa. Do you have an example of a location in Africa where so much money is being spent on gambling that the country’s having trouble getting funding for its other activities?
Perry Roach: Yes, so an example that we know clearly is South Africa. They have a 1.5 trillion Rand problem of gambling. It’s bigger than the car industry. That translates into $71 billion US dollars. Now, if 60-70% of that $71 billion is unlicensed, that means the government is losing a tremendous amount of revenue, taxes, and experiencing all kinds of other negative effects.
But to your point, there was a local grocery store that did a study, asked a consulting firm because they saw their revenues going down. People are taking the money that they’re getting from their jobs or from the government and gambling it away.
John Robb: So, what do governments do? What is the enforcement approach? Is this a technology gap because these things are moving so fast? Or is it a lack of coordination across different stakeholders? How do they enforce this?
Perry Roach: John, it’s a great question and there’s lots of answers. The top answer I have, who owns this? Who owns this problem? So, if you take a look at the stakeholders, it’s the culture of the country. It’s the tax department; it’s the law enforcement who have to deal with these online crimes. It’s the people that lose their savings. It’s the operators that are losing the money to gambling. It’s the youth challenges.
The problem we have is we have to understand that this is a crisis, and what we’re seeing is the regulators are the ones that are responsible for regulating it, but they don’t have any tools. The other challenges that they face are the fact that it’s outside of the jurisdictional nature of what they usually deal with.
The internet is lawless. The internet is encrypted. The internet is basically faceless. So how does somebody handle something when they don’t even have jurisdictional control? Traditional tools like DNS filtering have sort of been the answer. What’s happened, as we know, as I mentioned, there’s half the legal companies today than there was two years ago, because the legal guys are all going to illegal. Why should they pay all this money in fees? The lack of real time intelligence and visibility and tools for the law enforcement and the regulators.
But we’re seeing a lot of pushback now. We’re seeing the regulated guys who pay their fees and their taxes saying, listen, you guys have to do something. Now we’ve seen the ISPs having challenges with their customers and the customers calling up their ISPs and say, how could you let this happen? But what’s really a big challenge in this industry is the money is generated in a provincial manner.
Let’s assume a country might have nine or ten provinces but the way to manage this, especially with a Netsweeper solution, is across the board centrally or nationally. I think there’s a dynamic there that we are breaking down the barriers to make sure everybody understands that DNS is not working, automation is not working with what they have today. They need to have a centrally managed national approach to this.
In fact, one of our recent proof of value customers hired a consulting firm, and the number one thing [the consultant] asked the country to do was to hire a centrally managed national strategy like a Netsweeper where everything is automated. When 10 new IP addresses fire up today, we can get that tomorrow or within real time.
So, this is one of the biggest issues that we need to deal with and help governments with. Show them the solutions. Understand that you need to manage this nationally and we’ll get this thing sorted.
John Robb: So, let’s shift into solutions because clearly this isn’t something that can be addressed with traditional approaches alone. From your perspective, what does effective detection and enforcement actually look like in today’s environment? How important is it to move beyond the traditional static blocking lists and move into something that’s maybe more dynamic or something like that?
Perry Roach: Well, it’s very important, John, real time content classification analysis is what Netsweeper specializes in. What does that mean? What it means is sometimes the websites that are legal will be blocked, but the next second, 10 more IP addresses and URLs will pop up, and this is the biggest problem with the current manual and DNS challenges. Not only do you have to understand the whole mechanics of the internet, but you actually have to understand how the criminals and the unlicensed guys are operating.
What we offer is a deep visibility way beyond a DNS level control system. We identify, categorize, and block contact in real time dynamically. We literally find 50 million new websites a day of all different categories, and a significant amount of those are in the gambling sites.
What we also do is we cover across multiple customers and bring this immediate information to them. As we deploy our world system, we must deliver accuracy, scalability, at the same time simultaneously. And governments have a management issue. Whose problem is it? How is a government in one country supposed to manage the entire world’s internet? We bring these tools immediately.
John Robb: We’ve talked about this management problem before the jurisdiction, the regulator, all of the internet content goes through the ISPs. Where do they fit here? Where are the ISPs? Is that where the problem is or is it a combination? What are your thoughts there?
Perry Roach: Well, it’s kind of the root of the problem, right? Everybody thinks that the ISPs are the internet. The ISPs actually deliver a network that allows all these businesses, IP addresses, URLs and websites, as we call them, each one of those, every advertiser is a business. Every website is a business, and they just simply enable this to go across their network.
The issue is governments think that they can control that, so they put the onus on the ISP. But where ISPs play a critical point is they are the centralized choke point. So, what we do is we work with the ISP in a very non-intrusive way, zero latency, zero risk of taking their network down because they provide the network level visibility with our system in combination.
We then can enforce the government policies to the level of the size of that country from tens of millions to hundreds of millions of users at one time. We actually do that, as mentioned without any impact to the network performance. We enable the ISPs to become part of this compliance, and they’re our protection partners.
John Robb: So, it’s a multi-factor approach here where the different stakeholders all have to be involved. The governments, the ISPs, this is a government regulatory problem. It’s also a technical problem. And one of those technical aspects you’ve mentioned a couple of times is DNS filtering. Why is DNS filtering not the preferred method?
Perry Roach: DNS [filtering] is a solution that was brought in about 25 years ago, and the reason that a lot of people think DNS is going to work is because it’s ease of installation. But at the end of the day, it’s truly not fit for purpose. It’s very static filtering. It doesn’t find these websites that pop up every second and it’s very easily bypassed.
A country may think that they’re protected with DNS, but they’re not even close. With Netsweeper, we use a dynamic, AI driven categorization strategy. This is 26+ years old, and with a continuous improvement process. We operate at the network level, and we see and give the visibility of all the traffic.
With our real-time intelligence reporting and enforcement, we scale and give this visibility. If a website is found within one second, all the ISPs are treated equally in that country, and really what ends up happening is this very complex, very complicated tool that is set up is the tool for the regulator to manage and support them to do their job.
John Robb: Now we’ve talked through sort of what the issue is. We’ve talked through some of the technology. I want to talk a little bit about some of these broader issues again, because I think that this is an area that when people look at this as a technical solution, they aren’t necessarily thinking about some of these other areas.
So, one of the areas that I’m thinking about here is the FATF compliance, the Financial Action Task Force. Why is illegal gambling one of the things that they consider when they’re looking at gray listing a country.
Perry Roach: That organization that you mentioned, FATF, is an organization that’s trying to regulate and equalize how countries operate and the financial crimes on the internet.
In the past, detection of previously unknown illegal gambling sites has been very, very, very difficult. And because the internet is about the world, not your country, it does not have and has not had immediate blocking or reporting capabilities. So, with the opportunity to, with improved regulatory enforcement and compliance, there’s now a need to keep countries and stop countries from being on this blacklist and gray list.
John Robb: It seems that would have a real impact on the financial wellbeing of a country. So, I can see why you want to help in that regard. We just talked about FATF and the overall problems that a country might face. It’s very broad, very countrywide. Is there a human element to this? What about underage exposure? Are kids at risk if it’s not regulated. What are your thoughts on this being addressed at young people?
Perry Roach: It’s a big problem, John. You know, illegal platforms are designed to maximize engagement and addictive behavior. And as an underaged who’s, let’s say enthusiastic about sports, it just takes them over with no regulation.
This means no safeguards, no player protection, no limits, warnings, exclusion, tools, nothing. Users can experience faster financial loss and deeper addiction cycles than anywhere. And they also have this ability to target high risk users.
Now, I’ll give you an example. What we’re seeing around the world is a lot of advertising from unlicensed gamblers. How can a government not only let legal gambling and then also let all the unlicensed guy’s sponsor sports teams and do that? So, what happens is that I don’t think the regulators and the governments have seen the silver bullet here, but if you stop unlicensed gambling that means that the unlicensed gambling is out of business with Netsweeper blocking them and turning off their business. So, there’s no way they’re going to now advertise. Oh, number one, your advertising problem goes away. Are they going be able to target and manipulate kids? No, because they’ll have to be regulated. If they don’t follow the rules, they get shut off.
There’s a lot of questions about cryptocurrencies and ways to get around this. Well, if the unlicensed guys aren’t operating, they don’t have any crypto wallets to operate with. If the license guys start to use cryptocurrencies and they’re not following the regulation, they just get shut off. So, it all comes back. It all circles back to enforcement with Netsweeper.
John Robb: It sounds like from a prevention standpoint, the key here is enforcement. Now, you talked about this jurisdictional problem, the technology issues, the regulatory issues, policy issues. What can governments actually do to come up with a more coordinated and effective approach for solving this big problem?
Perry Roach: Well, it’s making sure that they understand the legislation behind this. Is it current legislation that you already have with organized crime or crime on the internet? But it requires a combination of policy, technology, enforcement, and legislation. If you just want to regulate and legislate alone, it won’t work.
You need to have technologies that enable blocking and limiting the access of this high-risk content. What Netsweeper offers is real-time monitoring and visibility to harmful patterns. And it’s a cat and mouse game, right? What we block today, we’ll have to block again tomorrow. Policy frameworks actually help define what should be restricted and how.
But Netsweeper has all kinds of additions that we’d like to add to your legislation and policy applications. At ISPs, governments and institution levels all need to be considered, and what we offer is a proactive approach not just the reactive enforcement.
John Robb: Well, it sounds complex. There’s a lot of stakeholders in this, and it sounds like it’s only going to get more challenging as more companies find ways to take advantage of the internet. How are you seeing illegal gambling evolve through decentralized platforms or other technologies that are maybe making it easier for them to make money and get around the regulations?
Perry Roach: It’s a combination of many things; the most recent thing is video. You may remember 5, 10, 20 years ago, video poker or video bingo. Well, what’s happening now is Netsweeper through our privacy module, offers blocking. And video streaming and piracy, and at the end of the day, with piracy blocking, you block streaming videos.
That’s going to be very handy in the next generation of requirements in the online gambling regulation. But what we’re also doing is increasing the use of our AIs and automation for the illegal operators. The growth of decentralized and harder to track platforms is really being fixed by our AI. We also have to have the ability to spin up infrastructure very fast, and what we’re seeing with scams on the internet, they’re bleeding over to the online gambling side, and the sophistication of fraud and scams is using AI. So, we have to fight AI with AI, but at the end of the day, when it comes right down to it, Netsweeper has these tools to not only keep up with what’s happening today, but to continually analyze and continuously improve the cat and mouse game of tomorrow.
John Robb: We’ve covered off a lot of points here about what the problems are, some of the kind of ideas about solving those problems. If I’m in the government or telco, where do I start? What is the next thing that I should be doing? Can you give me a few points on if somebody’s listening to this, what should they be doing next?
Perry Roach: We need to start off with implementing Netsweeper’s real-time monitoring and filtering enforcement solution. Once we get that set up, we can use actual data for your challenge. What that will do is help us with understanding the scope of the activity and what their network is requiring.
The next step would be to align with the government’s policies and the technology aligned with the telcos and show the regulators the tools that we have for them to do their job. And working with experienced partners like Netsweeper for a scalable deployment will allow the regulators to get visibility and enforce the laws in their country on the internet.
There has to be a proactive focus on visibility first, then the enforcement, and we can get that done right away.
John Robb: Even though it’s a complicated problem, it sounds like that’s a pretty simple, straightforward approach to figuring out how big the problem is and what to do about it. As always, Perry, you provide some great insight to what is going on out there in the world. I know you travel a lot and go to a lot of conferences and speak to lots of people, speak to lots of governments.
Is there anything that you would like to add one last thought that people can take away.
Perry Roach: I think it’s really important to look at the cultural side of this and the challenges that are occurring under our nose. I think it’s really important for somebody to take ownership and lead this process and we will help you as Netsweeper to share best practices and exactly what to do.
I think it’s very important to contact us as soon as possible before you put your legislative requirements in so we can add value at no charge. We’ll give you the legislative things that we think you should include, and I think it’s really important to identify the amount of money that is economically leaving the countries right underneath our nose. Everybody’s strapped for money. The recent crises are causing more and more deficits, and this can be fixed. Thank you.
John Robb: Well, thank you very much Perry, as the CEO of Netsweeper I’m sure you appreciate that people would go and visit netsweeper.com to learn a little bit more. And we appreciate you taking the time to talk to us through this complicated issue.
Thank you very much.
Perry Roach: Thank you.