A new study shows that each year, 1.5 million Britons bet up to 4.3 billion pounds on the growing gambling black market in the UK.
The study, conducted by Frontier Economics and commissioned by the Betting and Gaming Council (BGC), reveals the increasing risks unregulated gambling poses to player safety, the economy, and British sports.
The study highlights how the aggressive positioning of illegal operators undermines regulation while attracting vulnerable groups, particularly young people, and those who have self-excluded from licensed platforms.
Increasingly popular among young gamblers:
The impact of the black market on the UK economy is profound. Within five years, about 335 million pounds in potential tax revenue is expected to be lost, revealing the damage to public services. For reference, the annual loss could equate to the salaries of 1,700 nurses or provide 1.2 million additional GP consultations.
A particularly concerning aspect of the study is its findings on young people. According to the information gathered, over 20% of gamblers aged 18 to 24 use unregulated gambling platforms, often facilitated by secure messaging apps or virtual private networks (VPNs).
Compared to regulated operators, these platforms attract users with promises of bigger bonuses, anonymity, and fewer restrictions. They also utilize social media advertising, even targeting individuals excluded by licensed operators. The appeal of these sites is difficult for regulated platforms to match, especially since illegal sites are not bound by the same player protection rules.
The study shows that betting on illegal online sites alone exceeds 2.7 billion pounds, with an additional 1.6 billion pounds bet in physical illegal casinos.
BGC CEO Grainne Hurst called the findings "shocking" and a wake-up call for the government and regulatory bodies. She noted that overly strict regulation could push more players towards the black market. BGC advocates for a balanced approach, believing that moderate regulation combined with stable taxation is the most effective way to combat the growing illegal gambling industry.
International comparisons further validate BGC's stance, with countries like Norway and Bulgaria experiencing a surge in black market gambling activities after implementing strict regulations. For example, in Norway, currently 66% of gambling occurs on unregulated platforms, while in Bulgaria, 47% of bets flow to the black market.
These figures highlight how excessive regulation could drive players out of safer, more regulated environments.
Balance rules to protect players:
Researchers and industry leaders agree that while stronger enforcement is necessary, it is not a standalone solution. Andrew Leicester, Deputy Director at Frontier Economics, emphasized the importance of achieving balance in regulation and warned that excessive restrictions could inadvertently fuel the black market.
According to the study commissioned by the UK Gambling Commission, he stated: "This report shows that today, most gambling is conducted through regulated, visible channels.
This is good news, but there are also warning signs. The situation is rapidly evolving, indicating that black market gambling is becoming easier to discover and access. This report timely provides new evidence about the scale of the black market. Efforts to make gambling safer are important, but we must avoid simply pushing more players and spending towards unregulated providers, who are not required to adhere to regulations for safer gaming."
The report also reveals the challenges brought by the widespread use of VPNs, which can hide users' locations, making it easier for bettors to access unregulated gambling platforms abroad. Additionally, because regulated sites are very cleverly mimicked, many players still do not realize they are dealing with illegal operators.
Addressing these issues requires cooperation from multiple sectors, including internet giants and social media platforms, to prevent the spread of illegal gambling promotions. As illegal operators continue to exploit loopholes in the regulatory framework, the need to develop a more balanced, comprehensive strategy has never been more apparent.
