The SBC Summit 2024 in Lisbon takes place on September 24-26 at the Feira Internacional de Lisboa (FIL) and MEO Arena. Entain chair Barry Gibson introduced a Regulus report that proposes five strategies to combat the increasing menace posed by illegal gaming operators in the black market. Regulus found that black market gambling participation was on the increase and that Britain did not appear to be tackling this as robustly as they could.
Backed by FTSE 100 sports and betting group Entain, the Regulus report proposed measures which could help close a £340 million tax loophole for the UK Exchequer in the next five years.
Following the shock report commissioned by the Betting and Gaming Council (BCG) and published by Frontier Economics, which found that British gamblers staked £2.7bn on illegal and unregulated online black-market sites.
The report estimated that up to £1.6bn was staked in underground gambling venues and one in five 18-24-year-olds who have placed a bet gambled in underground venues.
Separate studies have shown that other European countries such as France, Portugal, Norway, Bulgaria and Germany also saw a rise in black market and unlicensed operators.
The amendments to the Online Safety Act 2023, implemented in 2024, have introduced several significant changes that impact the UK gambling industry and efforts to combat illegal or underground gambling.
Stricter regulation and expanded powers
Stricter regulations on gambling operators are being enforced by the Gambling Commission, which now has expanded powers includes:
- Mandatory player protection checks and new stake limits for online slots, ranging from £2 to £15 per spin
- A new statutory levy to fund treatment services and research for gambling addiction.
- Measures to protect vulnerable players, such as frictionless player protection checks to prevent unaffordable losses and rules to prevent harmful bonus offers
- To address issues of operator failures in player protection, a new industry ombudsman has been set up to handle disputes and offer compensation to affected customers
- The Gambling Commission now has the authority to work with internet service providers (ISPs) to block access to illegal gambling websites
- The Commission can also seek court orders to take down illegal gambling sites
- Platforms failing to comply with the new regulations face significant fines, up to £18 million or 10% of their annual turnover, whichever is higher
These adjustments were implemented with the goal of cultivating a safer gambling environment, increased protection for vulnerable individuals, and diminishing the prevalence of illegal gambling activities.
The five strategies proposed in the Regulus report seek to take the legislation further:
- Blacklist illegal sites and venues to make customers aware
- Restrict social media and mainstream advertising
- Block IP addresses and use the Online Safety Act to make accessing black market sites arduous
- Ensure enforcement is higher on the agenda
- Using legislation to block payments through the payment service providers and banks
A recent prosecution saw a former police sergeant and a racehorse owner who ran an illegal betting syndicate jailed for six years
Barry Gibson, Entain chair response
Addressing the SBC summit, Entain chair Barry Gibson stated that
“Legal and regulatory countermeasures can be highly effective as long as the domestically regulated product offer remains attractive.
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. It would ensure that customers get greater protection from playing with fully regulated and legitimate operators.
“This is a pivotal moment; if we go down the route of further tax increases rather than tackle the black market, it will drive even more customers towards unscrupulous operators and damage responsible, regulated businesses.”
It is clear European governments need to act faster whilst also maintaining the principles of consumer protection and freedom. Enhanced collaboration and enforcement among international agencies, along with ongoing pressure from the legitimate gambling industry, is crucial.
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