The number of British punters using black market websites to place bets has more than doubled, a new report reveals.
It comes as UK industry body the Betting and Gaming Council warns of “the dangers of complacency” about the threat from unlicensed and illegal gambling operators.
The PWC report is a brand new 66-page document based on data collected during November and December 2020.
It highlights a series of worrying trends, including a doubling of the money staked with unlicensed operators – a jump from £1.4bn to £2.8bn – compared to a similar study in 2019.
The new data also shows the number of customers using an unlicensed betting website has grown from 210,000 two years ago to 460,000.
The report also highlights worrying global trends that show the size of the black market in other countries.
The findings came as the Government conducts a Gambling Review, which has formally and specifically asked for information about the black market as part of its ‘Call for Evidence’, following widespread concerns raised by a number of parliamentarians.
Fears have also been expressed, including from senior horseracing figures, that the ongoing Gambling Commission consultation on affordability risks forcing ordinary punters towards the black market if checks on their income are too intrusive and onerous.
The BGC, the industry’s standards body, continues to support further changes to the regulated industry, but is urging ministers to make sure any brought forward as a result of the Gambling Review are carefully thought out.
Michael Dugher, the BGC’s chief executive, said: “This new report by the PWC is an impressive and comprehensive piece of work which demonstrates how the unsafe, unregulated black market is a growing threat to British punters.
“These illicit sites have none of the regulated sector’s consumer protections in place, such as strict ID and age verification checks, safer gambling messages and the ability to set deposit limits.”
Mr Dugher said that as head of the standards body representing the regulated betting and gaming industry he welcomes wholeheartedly the Government’s Gambling Review.
And he added: “It is important to stress that the big increase in the black market is not an argument against more changes to the regulated industry, but an argument that we need to get them right.”
On the number of British punters using black market sites, the PWC report says: “Based on our survey, the proportion of UK online gamblers using an unlicensed operator has increased from 2.2 per cent to 4.5 per cent in the last 1-2 years. This equates to an increase from c210,000 in 2018-19 to c460,000 in 2020.”
It goes on: “A sizable and growing share of stakes is placed with unlicensed sites, growing over the last 1-2 years broadly in line with usage (ie doubling). Those that gamble with unlicensed operators still almost always gamble with licensed operators as well.
“Our survey found that share of online stakes with unlicensed operators had grown from 1.2 per cent in 2018/19 to 2.3 per cent. This corresponds to a doubling of stakes with unlicensed online operators from £1.4bn to £2.8bn.”
The new report also suggests that the size of the online black market is larger in countries where the regulated betting and gaming sector is less competitive.
It points to countries including France, Norway, Italy and Spain – which have tougher restrictions on licensed operators – as examples of nations where the black market share is bigger than in the UK.
The report says: “This analysis suggests that the UK has a more ‘open’ online gambling market and currently has a smaller unlicensed market share than our European benchmarks.
“Whilst it is not possible to isolate the impact of individual regulatory characteristics, the above assessment suggests that jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive regulatory or licensing characteristics.”
Mr Dugher added: “I know this evidence is inconvenient to those who seek to dismiss and play down the threat of the black market, but there is a real danger of complacency.
“The UK risks sleep walking into changes where the main beneficiary is the unlicensed black market. We all have an interest in getting future changes right, so must take heed of this latest evidence and look at what is happening elsewhere around the world.”8