New Research Reveals Shocking Size of Black Market Gambling Across Europe

Research for the Betting and Gaming Council has uncovered the shocking scale of black market gambling in European countries following the introduction of strict new measures on regulated operators.

The findings come from industry research and a PWC report for the BGC as the Government finalises its work on the upcoming Gambling Review and against a backdrop of increased use of black market sites in the UK.

British punters using unlicensed sites have more than doubled in just two years, from 220,000 users to 460,000 and the amount staked is now in the billions of pounds.

The report by PWC said: “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.”

As the growth of these sites has rocketed, black market sites’ revenues in Norway have more than tripled since 2010 and French black market revenues have almost doubled since 2015.

BGC Chief Executive Michael Dugher said: “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.

“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.”

Rhadamès Killy, Former General Counsel at the French gambling regulator, said: “When we introduced our regulations in France in 2010, we analysed that the black market was the most extensive in the European states where the statutory regime was the most restrictive.

“A balance is required to effectively regulate without promoting the black market – I believe that balance is best struck when targeted restrictions focus on support for those at risk, but not excessively hinder or punish the wider public.”

According to a recent report from the Gambling Commission, rates of problem gambling have dropped from 0.6% to 0.3% of the adult population suggesting that safer gambling measures introduced recently in the regulated sector have helped the decline in the rate of problem gambling.

By comparison, Norway has a problem gambling rate of 1.4%, while a survey by Public Health France last year estimated that the rate in that country was 1.6% – up from 0.8% in 2014.

This latest research by the BGC backs similar studies across Europe that consistently show a link between stricter regulations – and a surge in black market activity.

The BGC is calling on Government to consider targeted measures which protect vulnerable gamblers – not a blanket approach which could force the vast majority who bet safely onto the black market.