Black market comments expose yet another example of the Gambling Commission's ignorance

It was not only in the Palace of Westminster's Committee Room 6 that eyebrows were raised while Gambling Commission chief executive Andrew Rhodes spoke to MPs on Tuesday. It can be said with some confidence that jaws dropped far and wide, including in Hong Kong and Melbourne.

Plenty of what Rhodes said to the Culture, Media and Sport select committee was questionable. What he said about the black market was utterly bewildering.

Punters in the UK are already switching from licensed bookmakers to illegal operators. They started to move in that direction due to the severe restrictions placed upon those who happen to be good at finding winners or value. The Gambling Commission has made no discernible attempt to change bookmaker behaviour in relation to restrictions but, however much it might protest to the contrary, it has undoubtedly been the reason why firms have been demanding customers subject themselves to affordability checks in order to continue betting. Some of those punters have vanished underground.

Asked for his views on the black market by Conservative committee member Damian Green, Rhodes gave the clear impression he believes it is not something to lose sleep over.

"I think the risk is overstated," he said, before reporting that, based on what he has been told, industry opinion indicates "the size of the black market is very small". 

Rhodes referenced what he considers to be many Gambling Commission victories in the battle against unlicensed bookmakers – although trumpeting the geoblocking of four domains was risible given the proliferation of mirror sites – and also painted a less than flattering picture of those who have been vocal about the black market threat.

"I think there are too many people claiming they know more than they do," he said, having earlier mused: "Every time I have heard someone say to me, 'Based on what is happening here, people are going to the black market", I have asked them the same question, 'Tell me where?' I have not once had an answer."

Andrew Rhodes played down the scale of gambling's black market problem when addressing parliament

Rhodes may not have been in Melbourne seven months ago when the Asian Racing Conference audience heard from representatives of the Hong Kong Jockey Club that the United Nations Office on Drugs and Crime estimates the global illegal betting market to be worth US$1.7 trillion a year. Closer to home, a PWC report submitted that £2.8 billion was staked by UK online punters with unregulated operators in 2020.

Who should we believe? An eminently credible witness is Martin Purbrick, chair of the Asian Racing Federation's Council on Anti-Illegal Betting and Related Financial Crime. Put simply, he is not persuaded that the Gambling Commission is doing a good job.

Purbrick told the Racing Post: "The UK seems to be singularly unprepared for the continually increasing impact of online illegal betting, evidenced from the lack of understanding by the gambling regulator of illegal betting markets as well as the fast-changing nature of online services.

"The impact and penetration of illegal betting operators to customers in the UK is contentious, but the facts regarding the growth of illegal betting markets are compelling. Illegal betting is a black-market illicit activity, hence investigation is required to understand it. If gambling regulators need to ask where to find the illegal betting market, then they do not know where to look."

It's not hard to work out which regulator Purbrick was talking about. Also timely was his assertion that the Gambling Commission should differentiate between betting and gaming, Rhodes having made clear in a blog on Thursday the two will continue to be lumped together.

"There are far higher rates of problem gambling among consumers using online casino gambling than there are for consumers betting on racing and other sports," said Purbrick. "This situation has worsened as major legal and illegal betting operators have provided a single-payment wallet to customers to move between online casino gambling and betting on racing and other sports. 

"These two distinct activities, which involve very different rates of harm, are conflated and confused. It is essential gambling regulators separate betting on racing and other sports from online casino gambling, and more strongly regulate the harm done from casino gambling.

"Gambling regulators need to understand that betting on racing and other sports is a game of skill involving the analysis of data to achieve success. Online casino gambling is a game of chance that involves nothing more than luck. The customers in these activities should be distinguished so that they can be appropriately regulated to ensure regulation does not drive customers to the illegal market."

Purbrick talks sense. As such, it is also worth highlighting his take on the Gambling Commission's decision to license operators whose names have then been plastered on the shirts of Premier League footballers.

Martin Purbrick has challenged the approach taken by the UK Gambling Commission

He said: "The epicentre of the growth of online illegal betting has been Asia, but the illegal operators – who are transnational organised crime groups – have become so cash rich that they have expanded their focus and reach into other markets as part of their continual expansion. 

"This has been evidenced by the large number of Asian betting companies sponsoring football teams in major leagues in the UK and Europe. Most of them are essentially illegal betting operators in Asia."

On that particular front, the Financial Times has just published a fascinating video documentary about the new norm of deals between obscure gambling firms and popular football teams. As part of its investigation, the FT made a freedom of information request to the Gambling Commission, seeking full disclosure over what the regulator knew about the owners of one particular operator it had licensed. The request was rejected. One section within the reasoning was extraordinary.

The Gambling Commission explained: "The public trust that the commission has robust processes in place to assess operators so that when they use the services provided by an operator, they are confident that there has been sufficient scrutiny of that operator to ensure that they are protected.

"If this information were released it would undermine that confidence. We consider that the public interest is better served by withholding this information."

The Gambling Commission was seemingly arguing that if the public discovered what the Gambling Commission had known when making its decision, the public's trust in the regulator would be damaged.

Confidence and trust have to be earned. The Gambling Commission is not doing especially well in that regard.

To complete the Gambling Commission's consultation on affordability checks, visit racingpost.com/consultation and follow the instructions.

The Racing Post also wants to hear from you: What has been your experience of affordability checks since the white paper was published at the end of April, and what do you think of the government's proposals? Have affordability checks affected your betting behaviour?

It's a chance for your voice to be heard. Email the Racing Post at editor@racingpost.com with the subject 'Affordability checks' to share your experiences, your thoughts about the government's proposals, and your contact details.

Read more on affordability checks . . .

Gambling Commission chief Andrew Rhodes claims risk of gambling black market is overstated 

Punters' body calls for affordability checks to be rolled back following minister's frictionless pledge 

'Not what's happening in the real world' - scepticism over minister's claims on affordability checks 

BHA hits back over Gambling Commission's claims that the black market threat is overstated 

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