The Rise of the Gambling Black Market

The Rise of the Gambling Black Market

The countdown to the publication of the government’s White Paper on the 2005 Gambling Act continues. While the Betting and Gaming Council (BGC) have been calling for action to be taken, their concern is that more restrictions will lead to a rise in players gambling on the black market.

Other European countries have already been imposing strict regulatory measures on their gambling industries. The BGC have said that this has seen an increasing number of gamblers heading to the betting black market. In Norway and France, there are now state monopolies of the gambling industry and over half the amounts staked are now on the black market.

That already seems to be happening here with the number of British players joining unlicensed gaming sites doubled in the past couple of years. A report by PreiceWaterhouseCoopers (PWC) states that the number has risen from 220,000 to 460,000 and the amounts being gambled run into billions of pounds.

Proposed Reform the 2005 Gambling Act

The past year or so has seen the British government gathering information as they look to reform the 2005 Gambling Act. One such measure that could be imposed is stricter affordability checks for gamblers. The fear is that as sites ask for bank details and other financial information, customers will object to this and gamble on the black market.

Another area that is likely to see changes is gambling advertising. Italy and Spain have already imposed restrictions and those countries have also seen gamblers move to the black market. Around a fifth of monies staked isn’t placed with licensed operators.

The PWC report believes that the stricter rules being imposed are why there is an increase in black market play. It 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.”

It adds that “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.”

Michael Dugher is the Chief Executive of the BGC. His view is that UK ministers should “learn lessons” from what is happening in other countries in Europe that are changing gambling rules.

Previously, a YouGov poll revealed that 58% of respondents were against the imposition of stricter affordability checks. Dugher has also said that the move by gamblers to the black market would cause major employment and tax revenue problems.

Almost 120,000 people are employed by BGC members, and they also pay £4.5 billion in tax. Horse racing receives £350 million a year from the BGC members and that would also be in jeopardy.