BGC issues stark warning after use of black market sites found to have doubled

As it prepares its long-awaited white paper on gambling, the British government was urged to learn lessons from abroad after new research revealed the number of British punters using black market betting sites has doubled in the last two years.

The Betting and Gaming Council pointed to a huge increase in illegal betting following the introduction of strict new measures on regulated operators.

The findings come from industry research and a PWC report for the BGC, as the government finalises its work on the upcoming Gambling Review.

The number of British punters using unlicensed sites has more than doubled in two years, from 220,000 to 460,000, and research into comparable markets abroad found that in Norway, where a state monopoly was introduced for all gaming, coupled with restrictions on stakes, affordability checks and advertising, the black market now accounts for over 66 per cent of all money staked.

In France, where online casino games are also a state monopoly, the black market figure is 57 per cent of all money gambled.

PWC found similar issues in Italy, Spain, Denmark and Sweden and its report said: "This analysis suggests the UK has a more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks.

"While it is not possible to isolate the impact of individual regulatory characteristics, the above assessment suggests jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics."

BGC chief executive Michael Dugher said: "We support the Gambling Review but there is a real danger it leads to the regulated industry being smaller and the illegal black market growing substantially.

Michael Dugher: 'This research is stark about the dangers of the black market'

"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. BGC members alone employ nearly 120,000 people and pay £4.5 billion in tax in the UK. The black market, of course, pays no tax and employs no one in our country.

"Any shift to the unsafe black market would also jeopardise the £350m 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."

Rhadamès Killy, former general counsel at the French gambling regulator Arjel, said: "When we introduced our regulations in France in 2010, we analysed that the black market was the most extensive in the European states where the statutory regime was the most restrictive.

"A balance is required to effectively regulate without promoting the black market."

The BGC also highlights the potential effect of tighter controls on problem gambling, which was found to have dropped from 0.6 per cent to 0.3 per cent of the adult population in the UK but is 1.4 per cent in Norway and is estimated at 1.6 per cent in France – up from 0.8 per cent in 2014.

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