The threat posed by cryptocurrency as the gambling black market grows

The threat from the gambling black market is something that is increasingly recognised by regulators and politicians, although that was not always the case. After all, it was only a couple of years ago that the Gambling Commission described the threat from the black market as being overstated.

However, this spring Gambling Commission executive director Tim Miller told a committee of MPs that the black market was now among its main priorities and that it was likely to become more and more costly to tackle it.

Gambling minister Baroness Fiona Twycross also made what might be a significant comment at this autumn's Labour Party conference when she told an event: "I know many of you in the room will disagree with the sector when they talk about the risk of the black market, but actually these are real risks that we have to take in the round."

The Gambling Commission is set to gain greater powers to tackle the black market in the Crime and Policing Bill, but the issue is one that is constantly changing and developing, something that was highlighted in a report published last week by the International Federation of Horseracing Authorities (IFHA) Council on Anti-Illegal Betting and Related Crime.

The report by Hong Kong Jockey Club director Douglas Robinson examined the accelerating adoption of cryptocurrencies by illegal online sports betting operators and its implications. 

It pointed to a Financial Times report this year which claimed that wagers paid in cryptocurrency last year generated $81.4 billion in gross gaming revenue, facilitated by use of VPNs and driven by social media influencers.

With an estimated growth rate of more than 20 per cent, the market could grow to more than $200bn by 2030.

The IFHA's report found that 43 per cent of the world’s most popular illegal betting websites now accept cryptocurrency deposits, up from 25 per cent in early 2024.

Martin Purbrick warned the illegal market would surge because of cryptocurrency

That was something Martin Purbrick, who chairs the anti-illegal betting and related crime council, told the recent IFHA conference in Paris represented a "surge of growth in the use of cryptocurrency in illegal markets".

By contrast, only five per cent of legal operators offered the option of betting accounts being funded by cryptocurrency.

Purbrick said: "It's consumers who are saying, 'I want to use cryptocurrency' for various reasons. I'm not saying the legal market should adopt cryptocurrency, but it isn't and the illegal market will surge because of this."

The Gambling Commission has said it is making ongoing contact with payment providers to detect and prevent illegal transactions.

However, the IFHA report said that cryptocurrencies had "undermined the established payments system for sports betting and other gambling by operating on decentralised networks, often offshore, outside of regulatory reach".

The growth of what it described as "pseudo gambling regulators" alongside online illegal betting had combined to "fundamentally undermine established national gambling regulation", and the report said that cryptocurrency use would continue that trend. 

Speaking to the IFHA conference, Purbrick told delegates that he had been told by one professional gambler involved in a large syndicate that almost all betting on cricket in India was settled in cryptocurrency, adding: "So that's already a huge illegal market in itself and almost 100 per cent of that market is settled in cryptocurrency.

"The volumes there are staggering, in the cricket market probably several hundred million dollars a year."

Hong Kong Jockey Club integrity expert Tom Chignell Credit: Scott Barbour

As for racing, Hong Kong Jockey Club integrity expert Tom Chignell told the conference that a study of one major global cryptocurrency operator had found that the sport represented only one per cent of its turnover. Nevertheless, that amounted to $100,000 a day, with UK racing the fourth most popular after Hong Kong, Japan and Australia.

"It's very unlikely that any of that $100,000 is going to benefit racing in any way," said Chignell. "In fact, all this operator is doing is posing a direct threat to the well-regulated licensed betting market."

He added: "Illegal market betting accounts are now easier to access, fund and withdraw from all because of cryptocurrencies. The integrity and reputation of racing and sports are at risk, as is the traditional funding model through betting levies."

In his report, Robinson concluded that the regulatory landscape generally was "ill-equipped to address the challenges posed by crypto betting".

He said: "While financial regulators have begun to impose controls on crypto assets, gambling regulators have largely failed to keep pace. 

"The result is a growing parallel market for online betting that operates outside of national regulatory frameworks, undermining efforts to prevent gambling harm and financial crime. 

"Without coordinated regulatory intervention, this trend will continue, eroding the effectiveness of existing gambling controls and exposing consumers to heightened risks."

Whether the Gambling Commission recognises this, or has the resources to tackle the issue if it does, remains to be seen.

BHA hopes to have new board in place by the end of the year

With so much attention being focused on next month's budget and what it might hold for British racing, it is easy to forget that the way the sport is governed is set for upheaval too.

Lord Allen took up the role only at the start of September and that was on condition that a new fully independent board be put in place at the governing body.

The process to recruit those members moved on at the end of September with the news that consultancy firm Egon Zehnder had been appointed to lead the recruitment process.

Finding candidates who would be regarded as being suitably independent, but with the requisite knowledge and skillset to join the BHA board, might at first glance seem easier said than done.

BHA acting chief executive Brant DunsheaCredit: Edward Whitaker (racingpost.com/photos)

However, the BHA's acting chief executive Brant Dunshea told a briefing for journalists last week that it was hoped the recruitment exercise could be completed by the end of the year, with the new board in place by that time, although he pointed out that he was understandably not close to the process.

Meanwhile, he and the BHA's general counsel and company secretary Catherine Beloff are looking at the transition to the new board, including working with the BHA's members to agree article changes.

There is, of course, also the issue of the recruitment of a permanent chief executive for the BHA.

Dunshea said that, again understandably, there was not much insight he could divulge on that process, other than to add: "From my perspective, it's business as usual."

Barber's bullets

FDJ United blames tax hike for drop in revenue

French gambling giant FDJ United has blamed rising taxes and increased regulation in its domestic market and in the UK and the Netherlands for a three per cent fall in revenue to €864 million in the third quarter of the year.

The parent company of Unibet said there had been a €21m impact from increased taxes on betting and gaming, and also noted that sports betting results "were highly unfavourable".

Chairwoman and chief executive Stephane Pallez said: “The change in FDJ United's revenue at the end of September reflects the prolonged decrease in our online betting and gaming business in certain markets, and the impact of higher taxation on gaming, particularly in France since July 1." 

GRAI sets strategy

The Gambling Regulatory Authority of Ireland last week published its statement of strategy for 2025 to 2027, setting out its priorities over the next three years.

The statement set out six areas of particular focus, including licensing, enforcement and consumer protection.

Minister for justice, home affairs and migration Jim O’Callaghan said: “This strategy isn't just about regulation; it's about educating the public, protecting those vulnerable to gambling harm and ensuring that the industry operates to the highest standards of integrity and social responsibility."

Evoke opens new Leeds headquarters

William Hill's parent company Evoke has officially opened its new offices at West Village in Leeds.

The new office brings together more than 750 staff members across areas including brand and creative, finance, broadcast, retail, trading, product, technology, compliance, AML and people teams under one roof. 

Rik Barker, group chief information and technology officer at Evoke, said: "Leeds is a key hub for our business, and this long-term investment underlines our commitment to the city and to the colleagues who make an impact here."

Date for the diary

Friday: The Racehorse Owners Association annual meeting takes place at Doncaster racecourse. Jim Walker is set to take over from Charlie Parker as president, while the board will undergo a refresh, with 13 candidates contesting three seats. It will also be boosted by the arrival of Racehorse Syndicates Association chair Dan Abraham as a co-opted member.

Read these next:

Bookmaker warnings about budget show racing will not be immune from impact on wider gambling industry 

Doubts remain over recent survey findings but problem gambling figures come at a sensitive time 

Confused? You bet they are! How Labour MPs' calls for gambling tax hike collapse under scrutiny 

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