BGC points to European black markets as warning to ministers

The Betting and Gaming Council (BGC) has pointed to the ‘shocking scale’ of betting black market across European countries following the introduction of strict regulatory measures.

With the publication of the government’s White Paper on the 2005 Gambling Act due in the spring, the BGC has consistently argued that imposition of strict requirements – such as greater affordability checks for bettors – could lead to a transition of customers towards unregulated, illicit operators which do not offer the same protections as licensed firms. 

Commissioning a PwC report, the BGC has asserted that the number of British users of unlicensed gaming sites has doubled in the past two years from 220,000 to 460,000, with the amount staked now allegedly totalling ‘billions of pounds’. 

Comparing the UK to other markets, the UK’s betting industry standards body noted that in Norway and France, the introduction of state monopolies has led to black market operators now accounting for 66|% and 57% of all staked money.

As tighter restrictions on gambling advertising are also a potential outcome of the 2005 Gambling Act review, the BGC also pointed to Italy and Spain – where betting marketing is heavily restricted – with the black market accounting for 23% and 20% of all wagers staked in both countries, whilst also referring to Sweden and Denmark.

PwC noted: “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.

“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.”

Referencing the report, BGC Chief Executive Michael Dugher argued that ministers should ‘learn lessons’ from the experience of other European countries when making decisions on the gambling act.

The PwC report is the second such report cited by the BGC this year as it seeks to represent the betting industry ahead of the overhaul of the UK’s regulatory framework, following on from a YouGov poll in which 58% of responding bettors rejected affordability checks.

“We support the Gambling Review but there is a real danger that it leads to the regulated industry being smaller and the illegal black market growing substantially,” Dugher remarked.

“This research is stark about the dangers of the black market, we have to learn lessons from abroad, and make the right choice at this dangerous crossroads. BGC members alone employ nearly 120,000 people and pay £4.5 billion in tax in the UK. The black market, of course, pays no tax and employs no one in our country.

“Any shift to the unsafe black market would also jeopardise the £350m a year which our members currently give to horseracing in sponsorship, media rights and the betting levy – financial support which has proved crucial during the pandemic.”

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