UK Illegal Gambling Sector May Hold Up to £4.3 Billion Annually

A recent study has revealed that as much as £4.3 billion is being staked annually on the UK's growing black market for gambling, with 1.5 million Brits involved. Conducted by Frontier Economics and commissioned by the Betting and Gaming Council (BGC), the study highlights the increasing dangers of unregulated gambling, affecting player safety, the economy, and the integrity of UK sports. Illegal operators have been aggressively targeting vulnerable individuals, particularly young people and those who have self-excluded from licensed gambling platforms.

Rising popularity among young gamblers

The economic impact of the black market is staggering, with potential tax losses of around £335 million projected over five years. These losses could have funded significant public services, such as 1,700 nurse salaries or 1.2 million extra GP consultations each year.

One of the most troubling aspects of the study is the rise in unregulated gambling among young people. Over 20% of bettors aged 18 to 24 are reportedly using illegal platforms. These sites attract users by offering larger bonuses, anonymity, and fewer restrictions compared to regulated operators. Secure messaging apps and virtual private networks (VPNs) make it easier for bettors to access these unlicensed platforms, which are also heavily promoted through social media. Particularly alarming is the targeting of individuals who have self-excluded from licensed operators, exploiting loopholes to draw them back into gambling.

The study found that over £2.7 billion is staked on illegal online gambling sites, with an additional £1.6 billion wagered at in-person gambling dens. BGC CEO Grainne Hurst called these findings "shocking" and urged the government to reconsider overly restrictive regulations that could drive more people toward the black market. The BGC advocates for a balanced approach, with moderate regulations and stable taxation being key to combating the rise of illegal gambling.

International comparisons

The BGC's concerns are underscored by international examples, where strict regulatory measures have led to surges in black market gambling. In Norway, 66% of all gambling now takes place on unregulated platforms, while in Bulgaria, 47% of wagers are placed on illegal sites. These figures suggest that over-regulation could push players away from safer, licensed environments and into the arms of illegal operators.

Striking a balance

Both industry leaders and researchers agree that while stronger enforcement is essential, it is not enough on its own. Andrew Leicester, Associate Director at Frontier Economics, emphasised the importance of finding a balance in regulations. He warned that excessive restrictions could inadvertently fuel the black market, stating, "Efforts to make gambling safer must avoid pushing more players and spending into unregulated providers who do not need to comply with regulations around safer play."

The report also highlights the role of VPNs, which help users bypass regulations and gamble on illegal platforms abroad. Many bettors remain unaware that they are engaging with unregulated operators, as these sites often mimic legitimate platforms.

Addressing these challenges will require cooperation between the gambling industry, internet companies, and social media platforms to prevent the spread of illegal gambling promotions. With illegal operators continuing to exploit gaps in the regulatory framework, a balanced, comprehensive strategy is urgently needed.