The online gambling market in the UK has recently seen a ramping up of steps and features to protect the vulnerable and promote safer gambling. One of the fallouts of this well-intentioned step apparently has been a rise in the number of black-market operators, according to the Betting and Gaming Council (BGC). The statements of one of the senior UKGC officials may have you believe otherwise, apparently.
At an event organized by Spillemyndigheden, the Danish Gambling Authority, Sarah Gardner, the Deputy Commissioner of the United Kingdom Gambling Commission (UKGC) presented the Commission’s view of the gambling sector today, more than 17 years after the passage of the Gambling Act.
Gardner felt that the risks of the black market stepping in and fulfilling the requirements and needs of gamblers were being overstated. While the UKGC naturally were concerned – up to a certain level – about the menace of illegal betting, she said it didn’t have the time to take these claims seriously ‘without credible evidence’.
The BGC’s Take on the GC Deputy Commissioner’s Observation
‘No way’, counters the BGC, which is the representative body of the industry. Pointing to a report tabled by PriceWaterhouseCoopers (PWC), it said that the danger of illegal betting markets was very much real. According to the report, it said, the number of people using the services of a black market operator had more than doubled in just one year.
Commissioned by the BGC in 2021, the PWC report showed that compared to the figures from a report tabled in 2019, the money that players staked with unregulated and illegal operators in 2020 had doubled to almost £2.8 billion.
Betting Black Markets: The Backlash of Gambling Legislation
The UKGC’s decision to roll out affordability checks to get regulated operators to toe the official line and keep gambling safe by getting players to provide personal information, including sensitive financial documents like tax returns and bank statements, may have backfired, according to the BGC. It has, it says, in fact resulted in an unusually large number of bettors switching allegiance to illegal black market operators to avoid handing over these sensitive personal documents.
Those are not the only people that are switching allegiance to the black market. Another group of people doing this come from a high-risk category – gambling customers who have self-excluded themselves at mainstream casinos and bookmakers.
Undue Importance Accorded to Betting Black Markets
Seeking to counter the claims of the BGC, Gardner said it was true that there was a school of thought that argued for the need to scale back or end some of the necessary interventions in the regulated market to minimize the risk of players switching sides and aligning with illegal and unregulated gambling operators.
She affirmed that “just because there are illegal sites and unregulated gambling – with no protections and bad outcomes for consumers – we should scale back or stop some of the interventions we think we need to make in the regulated market to mitigate against the risk of consumers jumping from regulated gambling into unregulated gambling.”
Gardner continued by stating that legislative bodies prohibit harmful practices knowingly,expecting to operate in a regulated market. The concern with regard to illegal online gambling has always been the prime focus, yet time should not be wasted on overstated risks, especially if red flags are being raised without proper and credible evidence.
Although Gardner did not outline particular precautions, she did highlight the fact that regulatory bodies need to be more vigilant when it comes to rubberstamping casinos and sportsbooks. The same protocol should be followed by top performing affiliate brands such as NoDepositHero, who over the years, has built its solid reputation of only recommending providers who do things by the book.
Raising the Standards: The BGC Perspective
The BGC has put its own spin in its response. While stating that it was fervently for raising the gambling standards to avoid issues like debt and addiction, the BGC said it was not too keen on ensuring this by reverse or halt any form of action. Instead, it was looking to avoid formulating any policies that were put in place post the gambling review that would drive a player to the black market.
Speaking about the issue, a BGC spokesperson said that the menace of a growing black market that is completely unregulated is very much real. In 2019, for instance, the number of customers using unregulated websites in the UK stood at 210,000. By 2020, it had doubled to more than 460,000! The money that players staked literally ran into billions of dollars. The outcome is clear – loss of tax revenue and shortage in the funding for various sports.
The GC Deputy Commissioner’s Take: Old Wine in a New Bottle
The GC Deputy Commissioner Sarah Gardner’s stance regarding the impact of black market operators is not anything new, apparently. Other leaders have been singing the same tune for a while.
A case in point is an observation by the CEO of the UKGC, Andrew Rhodes. In a speech last year, he had said that the black market was not enough of a threat for the operator to stop its preventative measures.
One of the themes that did stand out in her speech related to innovation in industry. She said for regulators to do their job effectively, it was necessary for them to stay in tune with current industry trends, especially those driven by innovation. Of particular relevance were new product categories that weren’t too easy to classify into standard formats, like cryptocurrency, NFTs and synthetic shares.
She said regulators needed to keep their eyes peeled where these new products and trends were concerned. The reason was simple – their increasingly widespread use was already blurring the lines that determined what products could be defined and regulated as gambling items.
