Study reveals billions staked in UK’s black market gambling industry
A new report has highlighted the alarming scale of illegal, unregulated gambling in the UK, revealing that an estimated £4.3 billion is staked annually on the black market. The study, conducted by Frontier Economics and commissioned by the Betting and Gaming Council (BGC), exposes the widespread and growing use of underground gambling sites and venues, which evade the UK’s regulatory frameworks and pose significant risks to both consumers and the broader economy.
The report found that £2.7 billion is wagered on illegal online platforms, while a further £1.6 billion is staked in underground gambling venues. This thriving black market has become a concerning alternative for many gamblers, particularly young adults. The research indicates that one in five bettors aged 18-24 has used these illicit services, often drawn in by aggressive advertising campaigns targeting vulnerable individuals, including those who have self-excluded from regulated betting sites.
Understanding the black market. Source: Frontier Economics report.
Black market threatens player safety and treasury revenue
Unregulated operators offer no player protection measures, increasing the risk of problem gambling. These sites operate without the oversight of the UK Gambling Commission, allowing them to attract customers with promises of anonymity and fewer restrictions on betting. According to the BGC, this unchecked growth is not only a danger to individuals but also deprives the UK Treasury of up to £335 million in tax revenue over the course of a five-year parliamentary term.
BGC CEO Grainne Hurst expressed concern over the black market’s ability to lure consumers away from regulated operators. “This report uncovers the disturbing reality of a growing, unsafe gambling black market,” Hurst said. “Unregulated operators don’t care about player safety, evade paying taxes, and undermine efforts to protect the most vulnerable members of society.”
Regulated market vs. black market in Great Britain. Source: Frontier Economics report.
A call for balanced regulation
The BGC, which represents 90 percent of the regulated gambling sector in the UK, warned that heavy-handed regulations could inadvertently drive more gamblers to the black market. The Council stressed the importance of balanced regulation and stable taxation policies as the most effective means of curbing the rise of illegal gambling. They cautioned against extreme measures, such as blanket advertising bans and overly restrictive affordability checks, which could push customers away from regulated platforms.
The report’s co-author, Andrew Leicester of Frontier Economics, focused on the dangers of pushing players toward unregulated operators. “Efforts to make gambling safer are important,” he said, “but there’s a risk that more stringent regulations could drive gamblers to black market providers, who do not adhere to any safety standards.”
Offshore platforms and emerging threats
The study also pointed to the increasingly sophisticated methods used by black market operators, including the use of cryptocurrency and encrypted messaging apps like Telegram to offer unregulated gambling services. Offshore platforms often mimic legitimate gambling sites, making it difficult for consumers to distinguish between regulated and unregulated operators. The use of Virtual Private Networks (VPNs) to access these sites is becoming more common, further complicating efforts to curb illegal gambling activity.
The black market’s infiltration into the UK’s gambling sector follows similar patterns seen in other European countries, where strict regulations have led to a surge in unregulated gambling. In Norway, for example, over 66 percent of all bets are now placed on illegal platforms.
Players habits regarding the black market in the UK. Source: Frontier Economics report.
The role of regulated operators
Despite the challenges posed by the black market, the regulated gambling sector remains a major contributor to the UK economy. BGC members generate £7.1 billion annually, support 110,000 jobs, and provide essential funding to popular sports like horse racing and football. In addition to their economic contributions, these operators are committed to player safety, offering tools like deposit limits, self-exclusion, and responsible gambling measures.
The BGC has called on the UK Government and regulatory bodies to take a more proactive approach to fighting the black market while ensuring that regulations for the licensed sector remain balanced and fair. The organisation also urged tech companies and internet service providers to work more closely with regulators to block illegal sites and prevent them from targeting UK consumers.
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