The Cobra Effect in Gambling: When Regulation Backfires

By

Denitsa Lyutskanova

Denitsa Lyutskanova Chief Editor

Denitsa Lyutskanova is the Head of Content at iGaming.com and a passionate advocate for Safer Gambling. With over a decade of experience in digital marketing, she has been with the company since 2011, working across 20+ markets. Denitsa leads a growing team of 30+ talented content writers and editors, driving impactful content strategies while promoting responsible gaming practices.

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· Chief Editor Last Updated: October 9, 2025

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Ever heard of the Cobra Effect? It’s when a solution meant to fix a problem ends up making it worse due to unintended consequences.

Prof. Dr. Andreas Ditsche, CEO of iGaming.com and primary contributor to iGamingCare, uses this analogy to describe the unforeseen outcomes of overregulation in gambling.

Overreach in Regulation Doesn’t Equal Safer Gambling

In the short video above, Prof. Dr. Ditsche and Floris Assies, Founder & CEO of BetterWorldCasinos.com, both agree that severe restrictions don’t always create a safer ор more sustainable gambling environment.

On the contrary, overregulation (e.g., monthly deposit limits, stake limits, etc.) has been proven to have adverse consequences in countries such as Germany, where the channelization rate is at an all-time low.

Setting excessive barriers won’t stop players from gambling. They’ll find a workaround, even if this means signing up with unlicensed operators on the black market.

What’s the Right Strategy?

Regulation must strike a balance. Nuanced and fair rules should be needed to ensure a well-controlled environment attractive enough for players to stay in the legal market. Highly restrictive legal frameworks without any flexibility can produce the opposite of what’s intended.

Every licensed operator should offer responsible gambling tools, such as deposit and time limits. However, these practices shouldn’t become a barrier for players to overcome.

Listen to the latest episode of the iGamingCare podcast for the whole discussion between Prof. Dr. Ditsche and Floris Assies. Gain more expert insights, and don’t hesitate to share your thoughts and comments.