Report Shows Black Market Threats to UK Gambling Industry
A report commissioned by the Betting and Gaming Council reveals the threat the UK gambling industry faces from the black market.
The UK gambling industry is undergoing several changes currently as regulators try to make the industry safer for consumers. At the same time, the industry and consumers, are at risk due to the black market. To try and fully understand the issue, the Betting and Gaming Council (BGC) commissioned a report with help from Entain plc and William Hill. The report findings have been revealed and show just how the industry is being affected.
Big 4 auditor PWC was hired by the BGC to complete the study. The goal was to research and provide evidence on black market threats to the gambling sector in the UK. According to the report, the number of UK online gamblers who know about the black market remains at an even keel, at around 4.5 million people.
However, the number of UK residents using black market sites have increased. Within the past year, the total number of UK users accessing black market sites went from 210,000 to 460,000. This was a huge jump in just a short amount of time.
On top of traffic, the stake amount wagered by players via black market sites also increased. From October 2019 to November 2020, the bet totals rose from £1.4 billion to £2.8 billion. This was an increase of around 1.1%.
The study used primary research and consumer surveys to obtain the information. The report builds on an investigation that took place from 2018 to 2019. At the time, the investigation revealed that illegal gambling operators represented a meaningful segment of the market, but it was a small portion.
From the 2018/2019 study to now, PWC was able to discover that unlicensed online gambling activity was increased this past year to 2.2% of all gamblers.
Why the Increase?
The report comes at a time when the BGC has seen skepticism from anti-gambling campaigns that operators in the UK are exaggerating the threat of illegal operators who are targeting players in the UK. It is not an exaggeration and the threat is apparently real.
From consumer feedback, the study was able to identify reasons why online players have moved from the regulated industry to illegal sites. For starters, the ease and quickness of creating a new account was a big factor.
Players also found odds were better and cash withdrawals were fast paced. Most bettors are concerned with the speed and quickness of withdrawals as well as convenience of gameplay. Overall, it was discovered that web searches for unlicensed betting sites came in at over 13% of all gambling operators, which consists of 98 sites.
While the number of players from the UK taking part in unlicensed gaming has increased, the number of illegal operators is lower since the last survey by 11%. The number of unique operators dropped by over 40%.
Legal operators do dominate the market in the UK when it comes to overall visits. The largest identified unlicensed operator was beat out by bet365 which had 35x more annual web traffic. However, traffic to illegal operators was still around 27 million visits for the year.
Now, it has been suggested that players need to know more about unlicensed operators. Because the number of people who understand the black market has not moved, more information needs to be provided so players can understand the risk of playing at an unauthorized site.
The BGC feels that if the regulated industry continues to become stricter than it already is, it will lead to players moving more towards the black market. The group recommends that regulators do not make any more restrictions at this time to avoid this switch from happening.