A new study has revealed that up to £4.3 billion is being wagered annually by 1.5 million Brits on the UK’s growing black market for gambling. The research, conducted by Frontier Economics and commissioned by the Betting and Gaming Council (BGC), sheds light on the increasing risk posed by unregulated gambling to player safety, the economy, and UK sports. The study highlights how aggressive targeting by illegal operators undermines regulations while attracting vulnerable individuals, particularly young people, and those who have self-excluded from licensed platforms.

Rising popularity among young gamblers:

The black market’s impact on the UK economy is profound. With approximately £335 million in potential tax losses projected over a five-year period, these figures reveal the toll on public services. For context, the annual loss could fund up to 1,700 nurse salaries or provide 1.2 million extra GP consultations.

One particularly concerning aspect of the study is its findings regarding young people. According to information gathered, over 20% of bettors aged 18 to 24 reportedly use unregulated gambling platforms, often facilitated by secure messaging apps or virtual private networks (VPNs). The appeal lies in the promise of bigger bonuses, anonymity, and fewer restrictions compared to regulated operators. These platforms are also taking advantage of social media advertising and even target individuals who have self-excluded from licensed operators. The appeal of these sites is difficult for regulated platforms to match, particularly since illegal sites are not bound by the same rules regarding player protection.

The study indicates that more than £2.7 billion is staked on illegal online sites alone, with another £1.6 billion wagered at in-person, illegal gambling dens.

BGC CEO Grainne Hurst has called the findings “shocking” and a wake-up call for the government and regulators. She pointed out that overly restrictive regulations risk pushing more players towards the black market. The BGC advocates for a balanced approach, arguing that moderate regulations combined with stable taxation are the most effective defenses against the growing illegal gambling sector.

The BGC’s stance is reinforced by international comparisons, with countries like Norway and Bulgaria experiencing surges in black market gambling following the implementation of strict regulatory measures. In Norway, for example, 66% of all gambling now occurs on unregulated platforms, while Bulgaria sees 47% of its wagers going to the black market. These figures highlight the potential for over-regulation to drive players away from safer, regulated environments.

Balancing regulation to safeguard players:

Researchers and industry leaders agree that while enhanced enforcement is necessary, it is not a standalone solution. Andrew Leicester, Associate Director at Frontier Economics, emphasized the importance of striking a balance in regulations, warning that excessive restrictions may inadvertently fuel the black market.

According to the study commissioned by the UK’s BGC, he stated: “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. This report provides timely new evidence on the scale of the black market. Efforts to make gambling safer are important, but must avoid the risk of simply pushing more players and spend into unregulated providers who do not need to comply with regulations around safer play.”

The report also sheds light on the challenges posed by the widespread use of VPNs, which mask users’ locations, making it easier for bettors to access unregulated gambling platforms abroad. Furthermore, many players remain unaware that they are engaging with illegal operators due to the sophisticated mimicry of regulated sites.

Efforts to address these issues will require cooperation across multiple sectors, including internet giants and social media platforms, to prevent the spread of illegal gambling promotions. With illegal operators continuing to exploit the gaps in the regulatory framework, the need for a more balanced, comprehensive strategy has never been clearer.