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Upcoming action against the UK black market could be so forceful it compels fellow national regulators to follow suit, the chief executive of the Gambling Commission has predicted.
The commission’s focus on preventing offshore operators from encroaching on the British market took centre stage late last year, when supplier giant Evolution announced that its UK licence was under review.
The commission was concerned that Evolution is supplying games to unlicensed operators alongside the regulated market.
Appearing on a webinar run by the International Association of Gaming Advisors (IAGA) on Wednesday (January 15), Rhodes confirmed the review was taking place and promised similar powerful enforcement in the months ahead.
“Some of the decisions that we’re going to make are going to have profound consequences for other regulators,” said Rhodes.
In part, he added, because the central figures in those decisions are active in numerous international markets.
“I think you will see greater harmonisation [in fighting illegal gambling] this year,” Rhodes said.
The role of suppliers in the black market has come under increasing scrutiny over the past year, with regulations from as far afield as Michigan and Romania ramping up pressure on their B2B licence-holders to disclose who they work with.
That was paired with action in Sweden against some of its newly minted supplier licensees in an attempt to throttle the supply of content to the black market, while neighbouring Denmark’s new B2B licensing regime, which took effect from January 1, includes similar provisions.
The UK’s Rhodes called on the regulated industry to do its part to make life harder for their supplier partners who want to play both sides.
“I don’t understand why anyone in the licensed industry would want to be in business with someone that is supporting illegal competition,” he said, adding that signing deals with B2B companies that are known to sign deals with offshore operators could be a business risk once enforcement ramps up.
“If we think it’s necessary to suspend the licence of an operator or supplier then their activity stops immediately,” he said.
Research by Frontier Economics, commissioned by the Betting and Gaming Council (BGC), estimated that as many as 1.5m British consumers stake around £4.5bn on the black market every year.
Speaking on the IAGA panel, BGC chief executive Grainne Hurst said that to meet the challenge laid down by the Gambling Commission its supplier members would be signing up to a soon-to-be-released code of conduct.
“We’re in the process of formalising it, but what the BGC’s B2B members will be committing to is that they do not [supply] black market sites that provide services to UK customers,” she said.
Rhodes was also quizzed on the incoming requirement for operators to conduct financial risk assessments on high-spending customers. The commission is currently running a trial with dummy customer data and the UK’s largest operators, which is due to end in March.
“The pilot is progressing well and we will update in due course. We are learning a lot from it,” he said.
“I think it’s really important that this trial is evaluated in order to ensure its success,” said Hurst. “It’s really important that what we don’t do is pick up something that’s in the financial world and put it on betting and gaming customers.”
A review of the pilot would also need to ascertain if the checks are "genuinely frictionless”, she added.
Implementing financial risk assessments would tick off one of the key remaining pledges of the UK government’s white paper.
The introduction of a gambling ombudsman, reforms to casino machine allowances and online slots stake limits are among the major promised changes to UK gambling regulations yet to be delivered.
Hurst said she believes that 2025 will be a less politically charged year for gambling, and will see the white paper saga finally brought to an end.
“It does feel like we are getting to a crossroads whereby the white paper will, we hope, have been fully implemented by the end of this year and then that provides the industry with a period of stability, but also [time] to generate the evidence that's needed for future policymakers,” she said.
“I think we are much further along now in terms of testing the ideas, rather than just debating them,” said Rhodes.
“I think the debate will still be very intense but I don’t think that it will feel as political as it has been. It will still be challenging, but it ought to be because these are serious issues.”
