The illegal online betting market is “tightening its grip” in the UK according to the Betting and Gaming Council (BGC).
A new study commissioned by the trade and standards body for UK gambling, and published by microeconomics consultancy Frontier Economics, found that £2.7bn is staked on illegal, unregulated black market sites online each year, with up to a further £1.6bn staked in underground gambling venues.
In a video posted on the organisation’s YouTube channel, the BGC also outlined some of the dangers of the unregulated market, with a particular focus on young people.
The study found that one in five 18-24-year-olds who bet already use unregulated black market sites, and the BGC warned that illegal sites aggressively target young people through social media sites.
The regulated market in the UK services 14 million adults (excluding the National Lottery) and players are protected by responsible gaming tools such as deposit limits, time-outs and self-exclusion with GAMSTOP.
On the other hand, the black market offers unrestricted play, no verification requirements and anonymity. The report noted examples of unregulated operators promoting their ‘non-GAMSTOP status’, thereby allowing self-excluded users to circumvent the block and carry on gambling.
The BGC’s CEO Grainne Hurst described the results as “unnerving” as they expose the “true scale of the growing, unsafe, unregulated gambling black market”.
“From online gaming, to betting on sports like horse racing, millions of customers are being driven into the arms of pernicious black market operators. 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,” she added.
“By failing to adhere to the stringent standards set by the Gambling Commission, unregulated operators in the unsafe black market can make bigger offers, grant customers total anonymity, and promise the freedom to gamble without any controls or safety measures, unlike BGC members.
“Worst of all, these 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.”
In the video, the BGC also highlighted the economic impact of illegal gambling, as researchers found that black market gambling could deprive the Treasury of up to £335m over the course of a five-year parliament, representing a tax deficit of £39m per year.
The BGC compared the cost of the lost funds to the number of additional public services that it could support, noting that it is equivalent to up to 1,700 nurses’ salaries, or up to 1.2m extra GP consultations.
The video finishes with a message calling for the correct balance of regulations as a defence against the black market, a sentiment that Hurst echoed in her reaction to the findings.
She 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. Enforcement is only part of the solution.
“The fact is onerous and ill-judged regulations drive customers from the regulated sector to the unsafe, unregulated gambling black market.
“Proposals by anti-gambling prohibitionists like advertising bans or intrusive, blanket, low level affordability checks will not protect customers, in fact they will give another leg up to unscrupulous black market operators, the last thing anyone wants.
“Every comparable market in the world tells us the same thing. The best defence against this growing illegal gambling black market is getting the balance of regulations right.”
