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Younger and heavier gamblers in the UK are most likely to use black market online gambling sites, according to a new survey commissioned by the Betting and Gaming Council (BGC).
In a post calling for “balanced regulation and stable taxation”, the UK gambling lobbying and standards group said as much as £2.7bn is wagered with unlicensed operators, or about 2.1 percent of the amount bet legally, the BGC said on Thursday (September 19).
If offline illegal gambling is included, the sum would cost the Treasury up to £67m a year, according to the study carried out by Frontier Economics, a London-based economic consulting firm.
The report “exposes the unnerving true scale of the growing, unsafe, unregulated gambling black market”, said BGC chief executive Grainne Hurst.
“Millions of customers are being driven into the arms of pernicious black market operators,” she said. “These people don’t care about player safety, don’t want to pay their fair share to support sport and don’t pay a penny in tax.”
Most appealing to black market players are bigger bonuses, anonymity and the ability to operate without restraints such as the UK ban on gambling with credit cards, according to the report.
Although the current Labour government has yet to announce all its economic plans, raising taxes on gambling has been cited as a measure that would be viewed as relatively painless politically.
The UK’s online casino tax is 21 percent, and sports betting 15 percent, which has become among the lowest in Europe.
In the Netherlands, for example, the government is poised to raise taxes from 30.5 percent of gross gaming revenue to almost 38 percent, over protests from operators.
In July, Sweden raised its gambling tax from 18 percent to 22 percent.
The UK online black market has “high awareness, is easy to find, and is already commonly used", Frontier said.
But the legal market still seems paramount among UK gamblers, as the survey found that 98 percent of respondents said they could name at least one licensed gambling operator, while only 15 percent said they could name at least one unlicensed operator.
About 22 percent of respondents said they became aware of black market operators through social media and 13 percent said through sponsorships.
Younger players were most likely to access illegal sites.
About 16 percent of 18 to 24 year-olds said they used at least one black market website to gamble, compared with only 1 percent of those aged 65 to 74.
About 17 percent of those wagering more than £1,000 per month reported gambling using a black market website or social media access, compared with 6 percent of those betting under £200 a month, according to Frontier.
Although 94 percent of gamblers only used operators licensed in Britain and only 0.8 percent strictly used unlicensed operators, about 12 percent of spending was estimated to go with unlicensed operators, according to the survey.
About 5.4 percent of those surveyed used both regulated and unregulated operators, the survey said.
Cryptocurrency gambling sites are often promoted on mainstream social media sites such as Facebook, which let players bypass geographical restrictions, Frontier said.
The unlicensed sites “are making a mockery of the rules set up to protect the most vulnerable by aggressively advertising their services to those who have self-excluded”, Hurst said.
“The government and the regulator risk sleepwalking into this issue. Simply giving the [Gambling Commission] more powers and more resources to tackle the black market won’t, in itself, work,” she said. “Enforcement is only part of the solution.”
“Onerous and ill-judged regulations drive customers from the regulated sector to the unsafe, unregulated gambling black market,” Hurst said.
A Gambling Commission spokesman said the agency is “committed” to fighting unlicensed gambling and has an “extremely active specialist black markets team”.
Since April, that team has issued 750 cease and desist and disruption notices to operators and advertisers, the spokesman said.
The commission has referred 78,000 web addresses to Google over that period, with more than 50,000 removed by the search engine and 221 taken down, the spokesman said.
The web address removals have risen tenfold over the 2023-24 period, according to the agency.
One academic who has written about gambling issues said he was not aware of any strong evidence that “onerous” regulation has driven gamblers to the black market.
“With over 2,700 licensed gambling brands now operating in the UK, the industry has clearly grown greedy,” said Raffaello Rossi of the University of Bristol’s Bristol Hub for Gambling Harms Research
“If consumers are confused about which brands are legal and which are not, that confusion is the industry's own fault,” he said.
“If we genuinely want to help consumers distinguish between legal and illegal operators, then a gambling marketing ban — like those implemented in Italy, Spain, Belgium, and Ukraine — would be one of the most effective measures,” he said. “This way, any gambling advertisement that appears would clearly signal a black-market operator.”
The UK’s April 2023 white paper, commissioned by the previous government, said information about the size of the black market was limited and called for more research.
Channelisation in Britain has been estimated to be among the highest in Europe by sources including studies by the Danish Gambling Authority and the International Betting Integrity Association, with Portugal, Germany and Bulgaria among the lowest.
But tracking the black market is a fluid process and the European studies are at least two years old, Frontier said.
Frontier’s survey queried more than 6,000 residents, some from the general public and others from a sampling of customers of regulated operators, split into heavier and lighter gamblers.
