New Report Sets Out Plans to Tackle Growing Threat of Black Market Gaming Operators
- Research by consultancy Regulus Partners1 sets out “highly effective” countermeasures to help crack down on unlicensed operators worldwide
- Proposals include measures to blacklist black market operators, restrict marketing and payment provision, and step up criminal enforcement
- Policy tools would help close the “tax gap” of up to £335m across the next Parliament due to black market operators in the UK and improve protections for an estimated 1.5m black market players
- Ignoring the growth of the black market would have serious consequences for customers and cost hundreds of millions in tax, Entain chair Barry Gibson says at SBC Summit in Lisbon
UK, September 23rd: Governments should implement a concerted policy crackdown on the growing threat of black market operators to grow revenues and enhance player protections, according to new industry research.
The report from industry consultancy Regulus Partners, backed by FTSE 100 sports betting and gaming group Entain, set out a series of policy proposals to combat unlicensed operators in the UK and internationally. The measures would help close a tax gap of almost £340m for the UK Exchequer across the next parliament. This is based on a recent report by Frontier Economics for the Betting and Gaming Council which estimates the yearly gap in the UK due to black market operators to be around £70m.
The Regulus Partners report showed that despite the UK’s proportionate and well-balanced regulatory framework, black market participation in the UK is still growing. Overseas international markets are even more heavily affected such as France, where around 45% of gambling revenue is spent in the black market, and Germany, where as much as 60% is lost to unlicensed operators. This is because of the impact of bans or heavy restrictions on popular gambling products, which encourage players towards the black market.
The Regulus report warns that so far “anti-black market legal and regulatory countermeasures have not yet been utilised widely”. It set out five “highly achievable” tools including:
- Blocking payments to black market operators through payment services providers to force them out of the market - while working with banks to ensure legitimate customers can gamble
- Restrictions on mainstream/social media advertising
- Blocking the IP addresses of operators and using the new Online Safety Act to make black market access more onerous
- Stepping up criminal enforcement to tip the risk-reward balance against unlicensed operators doing business.
- Public blacklist to educate consumers
The report which was unveiled to 300 industry leaders at the CEO summit in Lisbon by Entain chair Barry Gibson, added that “legal and regulatory countermeasures can be highly effective as long as the domestically regulated product offer remains attractive”.
It follows the Frontier Economics study2 which showed an estimated £4.3bn in stakes being placed with black market operators in the UK, generating a total tax gap of up to £67.7m a year, including online and in person betting. Those under 35 are more than twice as likely to be black market users, accounting for two-thirds of stakes but exposed to fewer player protections. The regulated UK industry currently contributes £7.1bn to the economy and generates £4.2bn in tax while supporting 110,000 jobs in the UK alone.
Barry Gibson said: “Taking on the black market operators should be a key priority for policymakers around the world. It will tackle crime and raise money which could be spent on critical areas such as healthcare, education, and infrastructure. It would ensure that customers get greater protection from playing with fully regulated and legitimate operators.
“This is a pivotal moment; if we go down the route of further tax increases rather than tackle the black market, it will drive even more customers towards unscrupulous operators and damage responsible, regulated businesses.”
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Taking on the black market operators should be a key priority for policymakers around the world. It will tackle crime and raise money which could be spent on critical areas such as healthcare, education, and infrastructure. It would ensure that customers get greater protection from playing with fully regulated and legitimate operators.