Gambling Commission claims black market risks are 'being overstated'
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A leading Gambling Commission official has suggested the risks of the black market are "being overstated".
Speaking at an event held by the Danish Gambling Authority this week, the Gambling Commission's deputy chief executive Sarah Gardner said the British regulator had "a level of concern" about illegal betting, but said it had "no time" for claims about the black market's risks being made "without credible evidence".
In response, the industry's representative body, the Betting and Gaming Council, warned the illegal gambling market is growing and pointed to a PwC report indicating the number of customers using black market operators more than doubled in a single year.
The report, commissioned by the BGC in 2021, claimed there had been a doubling in the money staked with unregulated operators in 2020 to £2.8 billion compared to a similar study in 2019.
Bettors turning to the black market has become a significant concern within the betting and racing industries following the widespread rollout of controversial affordability checks across regulated operators, with many customers unwilling to provide the sensitive financial documents – including bank statements and tax returns – being requested.
As previously reported by the Racing Post, black market operators also target customers who have self-excluded from mainstream bookmakers through the Gamstop scheme by using search keywords such as 'non-Gamstop betting'.
Gardner said: "There is an argument, sometimes made in Great Britain, that just because there are illegal sites and unregulated gambling – with no protections and bad outcomes for consumers – we should scale back or stop some of the interventions we think we need to make in the regulated market to mitigate against the risk of consumers jumping from regulated gambling into unregulated gambling.
"I cannot accept this argument. Indeed, I believe that no regulator should knowingly allow bad practices of the type we are talking about here, practices which can cause harm, to carry on in the regulated market.
"And whilst we – like you – have a level of concern about illegal online gambling and it will always be an important focus for us, we have no time for those risks being overstated, without credible evidence, either."
In response, the BGC said it supported raising standards and that, rather than wanting to reverse or halt action, it instead did not want any policies brought in following the gambling review to drive customers to the black market.
A BGC spokesperson said: “The unsafe, unregulated black market is growing. Research by PwC found the number of customers using unlicensed betting websites has more than doubled, from 210,000 in 2019 to 460,000 in 2020 and the money staked is in the billions. The growth in black market gambling results in lost tax revenue and reduced funding for sport.
"We strongly support the gambling review as a further opportunity to raise standards and promote safer gambling, but any changes introduced by the government must not drive customers towards this growing unsafe, unregulated black market online."
The government's gambling review was launched in December 2020 but subsequent proposals for reform of the industry set out in a white paper have been subject to repeated delays. Its publication is expected within weeks.
Gardner said of the review: "It is often described, not unreasonably, as a once-in-a-generation opportunity to update our gambling framework and we look forward to the publication of a government white paper that will indicate next steps."
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