A new report reveals the astonishing scale of illegal, unregulated gambling in the UK, showing that approximately 4.3 billion pounds are wagered in the black market each year. The study, conducted by Frontier Economics and commissioned by the UK Betting and Gaming Council (BGC), exposes the widespread use and growing trend of underground gambling websites and venues that evade the UK's regulatory framework, posing significant risks to consumers and the economy as a whole.
The report found that 2.7 billion pounds were wagered on illegal online platforms, while underground gambling venues accounted for 1.6 billion pounds. This thriving black market has become a concerning option for many gamblers, especially young adults. The study indicates that one-fifth of gamblers aged 18-24 have used these illegal services, often attracted by aggressive advertising targeting vulnerable groups, including those who have self-excluded on official gambling sites.
Black Market Threatens Player Safety and Fiscal Revenue
Unregulated operators offer no player protection measures, increasing the risk of problem gambling. These sites are not regulated by the UK Gambling Commission, allowing them to attract customers by promising anonymity and fewer betting restrictions. According to the BGC, this uncontrolled growth not only poses a threat to individuals but also causes the UK Treasury to lose up to 335 million pounds in tax revenue over a five-year parliamentary term.
BGC Chief Executive Grainne Hurst expressed concern about the black market's ability to lure consumers away from regulated operators. She stated, "This report reveals the unsettling reality of a growing unsafe gambling black market. Unregulated operators do not care about player safety, evade taxes, and undermine efforts to protect the most vulnerable members of society."
Comparison of the UK regulated market and the black market. Source: Frontier Economics report.
Call for Balanced Regulation
The BGC, representing 90% of the UK's regulated gambling industry, warns that stringent regulation could inadvertently push more gamblers towards the black market. The commission emphasizes that balanced regulation and stable tax policies are the most effective means to curb the rise of illegal gambling. They caution against extreme measures such as a complete advertising ban and overly strict affordability checks, which could drive customers away from regulated platforms.
Andrew Leicester, co-author of the report from Frontier Economics, specifically discussed the dangers of pushing players towards unregulated operators. He said, "Efforts to make gambling safer are important, but there is also a risk that stricter regulation could push gamblers towards black market providers that do not adhere to any safety standards."
Offshore Platforms and Emerging Threats
The study also highlighted increasingly sophisticated methods used by black market operators, including the use of cryptocurrencies and encrypted messaging apps like Telegram to offer unregulated gambling services. Offshore platforms often mimic legitimate gambling sites, making it difficult for consumers to distinguish between regulated and unregulated operators. The use of Virtual Private Networks (VPNs) to access these sites is becoming increasingly common, further complicating efforts to combat illegal gambling activities.
The phenomenon of black market penetration into the UK gambling industry is similar to patterns in other European countries, where strict regulations have led to a surge in unregulated gambling. For example, in Norway, over 66% of bets are now placed on illegal platforms.
UK black market gambling habits. Source: Frontier Economics report.
Role of Regulated Operators
Despite the challenges posed by the black market, the regulated gambling industry remains a major contributor to the UK economy. BGC members generate 7.1 billion pounds annually, support 110,000 jobs, and provide essential funding for popular sports events like horse racing and football. In addition to economic contributions, these operators are committed to player safety, offering deposit limits, self-exclusion, and responsible gambling measures.
The BGC calls on the UK government and regulatory bodies to take more proactive measures to combat the black market while ensuring that regulation of the licensed sector remains balanced and fair. The organization also urges technology companies and internet service providers to work more closely with regulatory authorities to block illegal sites and prevent them from targeting UK consumers.
