UK gambling industry standards body Betting and Gaming Council (BGC) shared on Friday the results of research on the size of black market gambling across Europe, which it describes as “shocking.” Moreover, the BGC has warned the government that the UK is “at a dangerous crossroad,” and has urged ministers to learn lessons from other jurisdictions from abroad for its new gambling white paper.
The findings, which come from industry research and a PWC report for the BGC, uncover “the shocking scale” of black market gambling in European countries following the introduction of strict new measures on regulated operators.
They come as the government finalizes work on an upcoming Gambling Review and against a backdrop of increased use of black market sites in the UK. According to the BGC, the number of British punters using unlicensed sites has more than doubled in just two years, from 220,000 users to 460,000. The amount staked is now in the billions of pounds, the industry body says.
The research analyzes comparable European markets such as Norway, which has introduced a state monopoly for all gaming and restrictions on stakes, affordability checks and advertising, resulting in a black market accounting for over 66% of all money staked. In France, where iGaming is also a state monopoly, black market gaming accounts for 57%.
Research for the BGC has uncovered the shocking scale of black market gambling in European countries following the introduction of strict new measures on regulated operators. https://t.co/ClSClGPzMY
— Betting and Gaming Council (@BetGameCouncil) February 18, 2022
In Italy -betting and gaming advertising is completely banned- black market accounts for 23% of money staked, and in Spain, where a near total ban on gambling ads is in place from 2020, it accounts for 20%.
In Denmark, where tight restrictions have been placed on customer loyalty rewards, the Danish Tax Authority has warned of a possible 9% increase in the share. Meanwhile, in Sweden, a national survey found 38% of consumers who had chosen to self-exclude from licensed operators still bet online through unlicensed ones.
“This analysis suggests that the UK has a more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks,” the PWC report says. “Whilst it is not possible to isolate the impact of individual regulatory characteristics, the above assessment suggests that jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics.”
“We support the Gambling Review but there is a real danger that it leads to the regulated industry being smaller and the illegal black market growing substantially,” said Michael Dugher, BGC Chief Executive. “This research is stark about the dangers of the black market, we have to learn lessons from abroad, and make the right choice at this dangerous crossroads.”
The BGC was set up to raise industry standards and promote #safergambling. Problem gambling levels in the UK are low and falling – just 0.3% according to latest figures – but one problem gambler is one too many. We’re determined to do more to support those at risk. pic.twitter.com/5daGlYnVYj
— Betting and Gaming Council (@BetGameCouncil) February 17, 2022
The executive further remarked BGC members alone employ “nearly 120,000 people” and pay £4.5 billion ($6.1 billion) in taxes, while the black market pays neither to the country. The latest research by the BGC backs similar studies across Europe “that consistently show” a link between stricter regulations and a surge in black market activity, the industry body says.
“Any shift to the unsafe black market would also jeopardize the £350 million a year which our members currently give to horseracing in sponsorship, media rights and the betting levy – financial support which has proved crucial during the pandemic,” Dugher added.
In a statement, the BGC is now calling on the government to consider targeted measures which protect vulnerable gamblers in the UK instead of “a blanket approach which could force the vast majority who bet safely onto the black market.”
