More than £4 billion is being staked on the gambling black market by Britons every year, a new report has claimed.

The study by consultants Frontier Economics was commissioned by the Betting and Gaming Council (BGC), whose chief executive Grainne Hurst said proposals made by campaigners, such as low-level blanket affordability checks, risked driving more customers to illegal operators.

A previous report by PwC commissioned by the BGC in 2021 claimed there had been a doubling in the money staked with unregulated operators in 2020 to £2.8bn compared with a similar study in 2019.

Since then the last government published proposals for gambling reform in a white paper, which included extra powers for the Gambling Commission to enable it to tackle black market operators.

The Frontier Economics report used evidence from a survey of more than 6,000 people, as well as a number of operators, to estimate that £2.7bn was staked on unregulated gambling black market sites online every year, while up to £1.6bn was staked in what were described as underground gambling venues.

Grainne Hurst: “Millions of customers are being driven into the arms of pernicious black market operators”Credit: Neil Sampson

Hurst said: “This shocking report exposes the unnerving true scale of the growing, unsafe, unregulated gambling black market. From online gaming, to betting on sports like horseracing, millions of customers are being driven into the arms of pernicious black market operators. These people don’t care about player safety, don’t want to pay their fair share to support sport and don’t pay a penny in tax.

“By failing to adhere to the stringent standards set by the Gambling Commission, unregulated operators in the unsafe black market can make bigger offers, grant customers total anonymity, and promise the freedom to gamble without any controls or safety measures, unlike BGC members.

“Worst of all, these sites are making a mockery of the rules set up to protect the most vulnerable by aggressively advertising their services to those who have self-excluded.”

The report claimed black market gambling online had “high awareness, is easy to find, and is already commonly used”, and that one in five 18-24 year olds who bet had gambled with the black market.

The BGC warned black market gambling could deprive the Treasury of up to £335 million in taxation over the course of a five-year parliament.

Hurst added: “The government and the regulator risk sleepwalking into this issue. Simply giving the Gambling Commission more powers and more resources to tackle the black market won’t, in itself, work. Enforcement is only part of the solution.

“The fact is, onerous and ill-judged regulations drive customers from the regulated sector to the unsafe, unregulated gambling black market. Proposals by anti-gambling prohibitionists like advertising bans or intrusive, blanket, low-level affordability checks will not protect customers. In fact, they will give another leg up to unscrupulous black market operators, the last thing anyone wants.

“Every comparable market in the world tells us the same thing. The best defence against this growing illegal, gambling black market is getting the balance of regulations right.”

Frontier Economics associate director Andrew Leicester, one of the report’s authors, said it was good news it showed most gambling in Britain was done through regulated channels, but cautioned there were “warning signs”.

He added: “The landscape is evolving quickly in ways that suggest black market gambling is getting easier to find and access. This report provides timely new evidence on the scale of the black market.

“Efforts to make gambling safer are important, but must avoid the risk of simply pushing more players and spend into unregulated providers who do not need to comply with regulations around safer play.”

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