BGC-commissioned study claims 1.5m Brits gamble on the black market

The Betting and Gaming Council (BGC), an industry gambling group, has published the results of a new survey commissioned by the organization, in which it argues that as many as 1.5m British people may be gambling on the black market, in what is a previously unreleased figure.

The UK gambling market is sprawling online and offline

The total tally of black market operations could be siphoning off as much as £4.3bn from the regulated gambling market and, according to the study carried out by Frontier Economics, the share of the black market is growing.

The study comes ahead of a planned roll of affordability checks that the BGC fears will add friction to the onboarding process and drive more people to offshore operators. Frontier Economics estimates that more than one in five people aged 18-24 are turning to offshore operators, which are deemed unsafe, as they fail to uphold responsible gambling standards.

To put things in perspective, the BGC and Frontier Economics estimate that over five years, the Treasury will lose up to £335m in missed tax, because of these black market operations, arguing that this would be enough to book, for example, 1.2m additional GP consultations or up to 1,500 teacher salaries.

The makeup of the illegal gambling market is not only tied to interactive wagering or online operations, however. Some £2.7bn is believed to be gambled through online betting and gaming operators, but there is a huge demand for in-person gambling that is run by unauthorized parties.

By the researchers’ estimate, as much as £1.6bn is being wagered through illegal gambling dens. BGC CEO Grainne Hurst had this to say immediately after the report’s publication: "This shocking report exposes the unnerving true scale of the growing, unsafe, unregulated gambling black market."

"Worst of all, these sites are making a mockery of the rules set up to protect the most vulnerable by aggressively advertising their services to those who have self-excluded," he added, arguing that by failing to address the threat of the black market, vulnerable consumers continue to suffer.

The BGC has often been stigmatized as a gambling industry mouthpiece, and the organization has been a vehement protector of the industry’s efforts. However, there is some evidence to back the claims put forward by the BGC.

A more balanced regulatory approach is needed to vanquish the black market

For example, in Sweden, a tightly regulated gambling market, the channelization rates are falling rapidly, and the regulated market is failing to attract local customers at the same rate that black market operations are. Much of this is attributable to high-handed regulation.

Germany is in denial, many observers argue, with the country’s regulator accused of chronically underreporting the actual number of people who play offshore.

Frontier Economics Associate Director Andrew Leicester also commented on his company’s report, and said:

"This report shows that most gambling today is done through regulated, visible channels. That is good news.

But there are warning signs. The landscape is evolving quickly in ways that suggest black market gambling is getting easier to find and access."

The BGC believes that the only way to begin clawing that market share back from the offshore market is to embark on a balanced regulatory approach that does not put the regulated industry at a disadvantage.

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