Unlicensed offshore operators account for 36 per cent of all online gambling in Australia, according to new research from H2 Gambling Capital.

The research was commissioned by Responsible Wagering Australia (RWA), the industry body representing licensed operators such as bet365, Picklebet, PointsBet, Sportsbet, Betfair and Unibet.

The research suggests that Australians are losing A$3.9 billion a year to illegal sites, with this figure expected to rise to A$5.0 billion by 2029.

The availability of in-play betting is said to be the overall driver of illegal gambling participation, although players also cited better odds (48 per cent) and bonuses (44 per cent) as the most common single reasons for gambling offshore.

In-play betting, inducements and online casino gaming are all prohibited under Australian gambling legislation.

The rise of the illegal market is expected to cost the Australian government almost A$2 billion in lost revenue over the next five years, and almost A$800 million in lost product fees for sport and racing.

“These operations are often controlled by organised criminal networks in tax and regulatory safe havens, exploiting loopholes to launder money and dodge sanctions,” said RWA chief executive Kai Cantwell.

“Australia’s world-leading consumer protections are only effective if people stay within the system, and right now, it’s too easy to bypass them offshore with a few clicks.”

The research suggests that 50 per cent of Australians gambling offshore have done so while registered on BetStop, the national gambling self-exclusion register.

Cantwell added: “Ensuring Australia’s onshore market stays competitive is essential, because if people can’t find the products or prices they want here, they don’t stop gambling, they just go offshore.

“Unlike licensed operators, who use data to identify and support at-risk customers, illegal sites use it to target vulnerable Australians and minors with high-risk offers and exaggerated bonuses.”

The H2GC report includes a number of recommendations, including establishing a national illegal gambling blacklist platform, greater powers to block illegal offshore gambling sites, and rules to prevent financial transactions involving unlicensed sites.

Full report: Illegal offshore gambling, a growing threat (PDF)