The case for the channelization model as the predominant framework in online gambling regulation
Bibliographic Data
| ID | 22423231 |
|---|---|
| Authors | Kahlil S Philander (0000-0002-0747-0772, Washington State University, Everett, WA, USA, corresponding author) |
| Year | 2026 |
| Pages | 1-9 |
| Publication date | 2026-07-14 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | International Gambling Studies (JOURNAL) |
| Journal identifiers | ISSN: 1445-9795 • E-ISSN: 1479-4276 |
| Publisher | Informa UK Limited (PUBLISHER • GB) |
| DOI | 10.1080/14459795.2026.2697452 |
| OpenAlex | W7168241282 |
| Language | EN |
| References cited | 15 |
This letter to the editor proposes the adoption of a channelization model as the predominant framework for online gambling regulation. The model evaluates regulatory interventions using a two-part test: 1) Are meaningful protections in place within the licensed market? 2) What proportion of total gambling activity occurs within the licensed market? Policies optimizing only the first dimension while ignoring the second may reduce social welfare by driving activity offshore. Historically, financial transaction frictions substantially constrained unlicensed access, but the ongoing expansion of cryptocurrency use in off-shore sites and recent legitimization of stablecoin payment infrastructure through the enactment of the GENIUS Act in the United States and MiCA in the European Union is changing the relative attractiveness of unlicensed operators. As barriers to unlicensed markets fall, the competitive position of licensed markets becomes more consequential. Four policy implications follow: 1) Tax rates should be set at levels that allow licensed operators to compete with unlicensed firms; 2) licensed products should generally have similar feature sets as unlicensed alternatives; 3) advertising of licensed operators should be permitted, enabling increased relative awareness of licensed operators; and 4) enforcement resources should be balanced to target onshore infrastructure that enables offshore access.
Attractiveness · Commission · Database transaction · Enforcement · European union · Net neutrality · Payment · Auction Theory and Applications · Digital Platforms and Economics · ICT Impact and Policies
| Highly cited | No |
|---|