PWC report highlights consumer ease and indifference towards black market threats
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PWC report highlights consumer ease and indifference towards black market threats

A report commissioned by the Betting and Gaming Council (BGC), with the support of William Hill and Entain Plc, has provided evidence of black market threats to the UK’s gambling industry.

The BGC commissioned ‘Big 4’ auditor PWC to undertake the ‘evidence-backed primary research’ on black market threats to the UK gambling sector.

Findings indicate that although the number of UK online gamblers with awareness of black market operators has remained steady at around 4.5 million, the number of UK gamblers who have used these sites has increased from 210,000 to 460,000 within the last 12 months.

Furthermore, the stakes wagered with unlicensed operators has also increased from £1.4 billion to £2.8 billion, representing an rise of 1.1% from October 2019 to November 2020.

Drawing on primary research and consumer surveys, the study builds on a previous investigation from 2018 to 2019 which revealed that illicit gambling operators represented a ‘small but meaningful segment of the total market’.

PWC marked significant changes against findings recorded in 2018/2019 when market research suggested that unlicensed online gambling was participated by 2.2% of UK online gamblers.  

The BGC has published its report amid scepticism from anti-gambling campaigns that UK operators have exaggerated the threat of black-market operators actively targeting UK consumers.

Consumer feedback identified the reasons why some online gamblers have been moving to online operators. The ease and speed of setting up an account was often cited as a motivation, whilst odds and returns and quick cash withdrawals were the second and third most important criteria for most bettors.

An analysis of web searches also found that unlicensed betting sites accounted for more than 13% of all gambling operators found, representing 98 different websites.

However, the report did also acknowledge that the number of unlicensed online operators declined by 11% from the 2018/19 survey, whilst the number of unique operators also fell by 42%. This was attributed to changes in the Google algorithm, which has been a ‘significant driver in the reduction of unlicensed sites.’

Legal operators also continue to dominate the market in terms of overall visits. For example, bet365 had 35 times more annual web traffic than even the largest identified unlicensed online operator.

Despite a drop in the number of unlicensed website ranking on Google search terms, PWC found that awareness of unlicensed operators remained stable, with 44% of surveyed players indicating that they recognised an illegal brand. 

Furthermore, web traffic to illegal operators still amounted to 27 million visits throughout 2020. Web traffic to the 11 unlicensed operators identified by PWC also increased by 85% from October 2018 to November 2020.

A strong emphasis is placed on player responses to PWC’s survey, in which respondents  stated that they ‘would continue to gamble with unlicensed operators’ alongside licensed operators’ offerings.   

Survey feedback reported that unlicensed operators were ‘rated favourably’ if the provided greater odds/returns  for sportsbooks, whilst providing further east of deposit and withdrawal transactions.

50% of survey respondents stated that they would look for new operators if standard industry odds and pay-outs were to decrease. Whilst, 30% stated that they would consider ‘changing operator’ should licensed operators require more personal information to gamble.

The findings have been published as the UK Gambling Commission (UKGC) and parliamentary reformers conduct a significant review of the 2005 Gambling Act, and a debate around the issue of black market betting operators has become central to the proceedings.

While launching the report, BGC Chief Executive Michael Dugher  warned the government that UK gambling is  ‘sleepwalking’ towards a ‘black market disaster’ – should stricter regulations of the legal industry be introduced.

Although these claims have been criticised by the UKGC as being ‘exaggerated, the debate over the gambling review has spread to central government, as it was reported last month that Chancellor of the Exchequer Rishi Sunak had expressed concerns over the tightening of affordability checks to DCMS Secretary Oliver Dowden, following discussions with operators.

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