Fight against black market enters supplier realm…

UK regulator in industry first as it reviews Evolution Gaming’s licence related to its supply of games to unlicensed websites. Jake Pollard follows an evolving narrative for 2025 that is likely to spread across all regulated markets.

Industry stakeholders across Europe were put on alert just before Christmas when the UK Gambling Commission (UKGC) opened up a new front in the fight against black market operators – by looking into the activities of a supplier’s B2B customers.

In a statement to the markets, leading live casino supplier Evolution Gaming revealed that UKGC had started a review of its licence because its games were available on unlicensed UK-facing websites.

First-time look

It is the first time a supplier is being ‘officially’ investigated by a regulator. The news comes after the New Jersey Division of Gaming Enforcement closed an investigation in Feb 2024 that cleared Evolution of responsibility for some of its licensees’ activities in illegal markets after an anonymous report claimed its games were available in countries like Syria, Iran and Hong Kong. Evolution has filed a legal case to uncover the authors of the report.

In its findings, the NJDGE said there was “no evidence that Evolution sanctioned, promoted, permitted, or otherwise materially benefitted from its content offered by operators in any market that the NJDGE considers a prohibited jurisdiction”.

On a broader level, the issue raises the question of how far iGaming suppliers can be held responsible for the activities of their B2B customers. When the anonymous report targeting it came out in 2021, Evolution said it had no knowledge of its clients’ modes of operation or which countries they took bets from.

However, the UK Licence Conditions and Codes of Practice (LCCP) also states: “It is a licence condition of all gambling software licences issued by the Commission that the B2B operator licensed by us undertakes to secure contractually with its B2C operator clients that any British-based player accessing the network/platform does so via a Commission licensed B2C operator.”

Under the UK’s licensing conditions, operators are required to disclose when more than 3% of revenue comes from unlicensed markets but suppliers have generally escaped this scrutiny. Evolution is set to publish its FY24 results on 30 January, but has said the UK represents around 3% of its total revenues. It recorded revenues of c€1.5bn in the nine-month period to the end of Sep24.

Public scrutiny

Evolution was forced to announce the Commission’s review because it is publicly listed, yet other substantial but privately held suppliers also provide their products to unregulated operators but are not bound by the same disclosure rules.

In an interview set to be published by SBC Leaders magazine next week, Evolution said: “We do not control which markets our operator customers operate in. The decision about which markets to target with their services lies with the operators.”

However, as soon as UK licence review statement came out in December, it said “games on the identified websites not holding a Commission license have been made unavailable from the UK”.

The Gambling Commission declined the opportunity to elaborate on its approach when contacted by Gaming&Co and no timeframe has been issued with regard to announcing the results of its review into Evolution’s licence.

The growth of unlicensed iGaming in Europe’s largest regulated markets has been one of the most important industry trends of recent years. Licensed stakeholders in Germany, Sweden and France have been vocal in their criticism of restrictive regulations, which they say make unlicensed offers even more attractive to players.

As a result, “tackling black market operators is a big focus for the Commission and they are doing some good work,” Simo Dragicevic, co-founder of The Game Safety Institute, told G&C and SBC. 

Dragicevic advises the UK regulator as a member of its Digital Advisory Panel and added: “UKGC tends to lead the way with a lot of this stuff. There are much bigger black market problems in other jurisdictions. The UK’s channelisation rate is quite high, compared to Germany or France or some Scandinavian countries. This will become an increasingly important regulatory issue.”

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Article is published by SBCNews in partnership with Gaming&Co.