A new report by consultancy firm Regulus Partners, presented at the SBC Summit in Lisbon, urges governments to take stronger actions against the growing presence of black market gaming operators.
The report outlines a series of countermeasures aimed at curbing unlicensed gambling activity, which it warns poses significant risks to consumers and results in substantial tax losses.
The research, supported by Entain, highlights a tax gap of up to £335m ($448m) for the UK Exchequer across the next parliamentary term due to black market gambling.
This estimate builds on a recent study by Frontier Economics, which found that black market operators contribute to an annual £70m loss in tax revenue in the UK alone.
The Regulus report also points to international markets, such as France and Germany, where up to 60% of gambling revenues are diverted to unlicensed operators.
Despite the UK's regulatory framework for gambling, the report indicates that black market participation is on the rise. It attributes part of this growth to bans or heavy restrictions on popular gambling products, which may push players toward unregulated alternatives.
In markets like France, the report estimates that around 45% of gambling revenue is generated in the black market.
The Regulus Partners report proposes several measures to counteract the threat of black market operators, including:
- Blocking payments to unlicensed operators through payment service providers, while ensuring that legitimate customers can continue to gamble.
- Imposing restrictions on mainstream and social media advertising for unlicensed operators.
- Using the UK's new Online Safety Act to block access to black market websites by restricting their IP addresses.
- Increasing criminal enforcement efforts to alter the risk-reward balance for operators working outside legal frameworks.
- Establishing a public blacklist to educate consumers about unlicensed operators.
Barry Gibson, Chair of Entain, said: “Taking on the black market operators should be a key priority for policymakers around the world. It will tackle crime and raise money which could be spent on critical areas such as healthcare, education and infrastructure.”
The report follows concerns back in 2023 raised by the Betting and Gaming Council (BGC) regarding the surge in traffic to black market gambling sites during major events.
During the 2022 World Cup, visits to unregulated sites tripled, according to research by Yield Sec. The BGC has made efforts to bring attention to the risk posed by black market sites, which operate without safeguards such as age verification or player protections.
The report by Regulus Partners underscores the need for a concerted policy effort to reduce the influence of black market operators and ensure that consumers are protected within a regulated framework.
