The UK Gambling Commission (UKGC) has criticised claims from some betting operators of a thriving UK gambling black market, ahead of the upcoming review of the 2005 Gambling Act.
According to a report earlier this month by data and analytics firm PwC, nearly 9 to10% of all gambling related searches online were for black market sites, and unregulated operators accounted for 2% of all visits to betting sites – amounting to 27 million in total.
Furthermore, the report estimated that around 200,000 bettors, staking around £1.4 billion, used unlicensed gambling operators over a 12 month period between 2018 and 2019.
The report has been cited by industry figures as evidence of the potential risks of overregulation of the sector, arguing that increased red tape could push customers towards ‘unscrupulous’ black market operators, who have little to no regard for people’s age, financial circumstances, or mental wellbeing.
However, UKGC Chief Executive Neil McArthur has criticised the report for being ‘’not consistent with the intelligence picture’ as it did not differentiate between actual users visiting sites and automated bots.
As reported in The Guardian, McArthur – in a letter to a cross-party committee of MPs investigating the harmful effects of gambling – argued that the report lacked sufficient evidence to prove the existence of a major underground betting market.
He stated: “We know that licensed operators and their trade bodies are concerned about the impact of the illegal market, but our own evidence suggests that the impact may be being exaggerated.”
Furthermore, McArthur argued that allegations of a widespread gambling black market should be treated with caution ‘despite reports from consultants paid for by the industry, and should not distract from the need to continue to drive up standards and make gambling safer in the regulated market’.
“In any event, we are not convinced by the argument that suggests that raising standards in the licensed market will prompt consumers to gamble with illegal operators,” he added.
A range of new measures are being considered by the UK government as the review into the 2005 Gambling Act continues.
These measures could include imposing mandatory affordability checks by online casinos and sportsbooks if a customer deposits a certain amount per month, as well as extending the stake limit on slot games – which has already been in effect on high street betting shops’ fixed-odds betting terminals (FOBT) since 2019 – to the online sector.
The Betting and Gaming Council (BGC) continues to assert that the dangers of an illicit market are very real. A spokesperson for the group said: “We have repeatedly called on the government to use the online harms bill to crack down on access to these sites, and we would support financial service providers being obliged to block black market transactions.”
However, these calls have fallen on unsympathetic ears, as MPs continue to move ahead with the review into gambling regulations.
Labour MP Carolyn Harris, Chair of the All-Party Parliamentary Group on Gambling Related Harm, remarked: “The online gambling industry talks up the threat of the black market in an attempt to resist regulation and protect its profits, but trying to hijack the debate by manufacturing dodgy dossiers of information to further their own ends is an incredibly transparent tactic and will not be any kind of excuse to hold down standards.”
The announcement follows a letter drafted earlier this month calling on MPs to lobby Gambling Commission to rethink its review, pointing to a potential £60 million loss faced by the horse racing industry.
Although the author of the letter was not revealed, it was expected that the UK’s 59 racecourses would forward it to MPs.