If you increase your regulation and make the hoops that players have to jump through smaller, don’t be surprised when they seek new and, occasionally, illegal ways to get what they want.
That’s the stark warning that has been issued to the UK government ahead of their Gambling Act review after it was revealed that the black market for online casino gaming and sports betting has more than doubled in barely two years.
That was the conclusion of a 2021 report carried out by research giants PWC, who have identified a number of troubling trends within the industry.
The number of gamers using offshore and unlicensed casino sites is increasing, despite measures introduced by law-makers to minimise the visibility of these in Google and other search engines. The suggestion is that the popularity of offshore brands is spreading by word of mouth, which is very difficult to police.
That was confirmed in the report, which states: “While unlicensed operators appear to be less visible to unsuspecting UK customers now than they were in 2018-19, there is evidence of growing use and spend of these operators.”
Players heading to offshore casinos is bad news for countless reasons. The government doesn’t like it, of course, because these firms don’t pay taxes in the UK. But for gamers themselves, there is the very real risks associated of an unlicensed firm, with player protections minimal at best in some cases – indeed, your funds may not be protected at all if the operator suddenly disappears from view altogether.
Many black market firms don’t comply with UK regulations in a number of areas, particularly in welfare and safer gambling. Often, they won’t offer essential time out and exclusion tools that UK licensed firms must.
Black Market Black Hole
The PWC report has used data garnered from a survey of more than 2,000 gamblers in the UK in November and December – many of whom may have only begun casino gaming during the periods of restriction in 2020. Of these, 44% admitted to being ‘aware’ of specific black market operators.
The most worrying numbers to emerge from the investigation are the 4.5% of respondents who admitted to using an unlicensed casino or betting site, which has doubled from the 2.2% surveyed in 2018. That might only sound a small percentage, but taken as the full dataset of regular gamblers it could equate to as many as 100,000 people.
PWC also looked into internet usage, which revealed that traffic at a series of nominated sites – including some that are unlicensed – had increased by 85% in the two-year period from October 2018.
Another area of grave concern is the amount being wagered at black market sites. The focus group showed an increase of 1.1% in the period mentioned, and taken as a representation of the whole betting population in the UK that would equate to around £1.4 billion in extra spending.
The takeaway point from the PWC piece is that if enhanced regulations are introduced, perhaps in the wake of a review of the Gambling Act, it will almost certainly drive players to black market sites – more than 30%, according to the research, would seek out an operator at which they could circumnavigate affordability checks. An introduction of a monthly stake limit would see 18% of gamblers heading to an offshore site, the survey also revealed.