Consulting firm Regulus Partners released a new report at the Lisbon SBC Summit, calling for governments to take stronger measures against the increasingly rampant black market gambling operators.
The report outlines a series of measures aimed at curbing unlicensed gambling activities, warning that such activities pose significant risks to consumers and lead to substantial tax revenue losses.
This research, supported by Entain, shows that due to black market gambling, the UK Treasury could face a tax shortfall of up to 335 million pounds (448 million USD) in the next parliamentary term.
This estimate is based on a recent study by Frontier Economics, which found that black market operators cause a tax loss of 70 million pounds annually in the UK alone.
The Regulus report also notes that in international markets like France and Germany, up to 60% of gambling revenue is diverted to unlicensed operators.
Despite having a gambling regulatory framework, the report indicates that participation in the black market is still on the rise in the UK. The report attributes part of this growth to bans or strict restrictions on popular gambling products, which may force players to turn to unregulated alternatives.
The report estimates that in markets like France, about 45% of gambling revenue comes from the black market.
Regulus Partners' report proposes several measures to address the threat of black market operators, including:
- Preventing payments to unlicensed operators through payment service providers, while ensuring that legitimate customers can continue to gamble.
- Restricting unlicensed operators from advertising on mainstream media and social media.
- Utilizing the UK's new cybersecurity law to block access to black market sites by restricting IP addresses.
- Increasing criminal enforcement to change the risk-reward balance for operators working outside the legal framework.
- Establishing a public blacklist to educate consumers about unlicensed operators.
Entain Chairman Barry Gibson stated: “Combating black market operators should be a top priority for global decision-makers. This will fight crime and raise funds that can be used for critical areas such as healthcare, education, and infrastructure.”
The report was proposed by the Betting and Gaming Council (BGC) in 2023, which expressed concerns about the surge in traffic to black market gambling sites during major events.
According to research by Yield Sec, during the 2022 World Cup, traffic to unregulated sites doubled. The BGC has been working to raise awareness of the risks posed by black market sites, which operate without safeguards such as age verification or player protection.
The Regulus Partners report emphasizes the need for coordinated policy efforts to reduce the impact of black market operators and ensure consumer protection within a regulated framework.
