UKGC Are “Alive to the Dangers” of the Black Market

The Gambling Commission state they are “alive to the dangers” of the black market. The regulator admits they may need a broader range of tools to tackle the threat of offshore operators.

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UK Regulator Aware of Illegal Threat © Pixabay.

The UK regulator, the Gambling Commission, has said that they need new tools in the battle against illegal operators. UKGC executive director Tim Miller said the regulator is “alive to the dangers” posed by the black market.

The UKGC said they are committed to clamping down on operators who are not licenced by the regulator but have promised that this action will not be at the cost of reducing standards in the UK’s regulated market. Miller in a keynote speech at the Know Now conference, which focuses on social responsibility for gambling operators.

The industry is expecting sweeping changes with a review of the current legislation regarding betting currently underway by the government. The UKGC has played a leading role in the review, and industry insiders expect a seismic shift in regulations. Many MP’s feel change is overdue, and Boris Johnson has famously said that the current legislation is “analogue laws in a digital age”.

The industry, however, argues that a heavy hand in the regulated market would see customers turn to unlicenced operators who would not be affected by new rules or regulations. The Betting and Gaming Council, a trade body representing the interests of over 80% of the main UK facing operators, will likely flock to illegal online offerings with fewer customer protection standards in place.

In the past, the Gambling Commission has been at loggerheads with the industry over the threat of offshore operators and accused betting companies of exaggerating the threat of illegal operators. In response, the industry commissioned a study by well-respected PricewaterhouseCoopers, which suggested that the proportion of UK online consumers gambling with an unlicensed operator increased from 2.2% in 2018-19 to 4.5% in 2020. This figure was an increase from 210,000 players to 60,000 players.

The report showed that the money spent with illegal operators rose from £1.4bn in 2018-19 to £2.8bn in 2020. This increase was even though the black-market awareness rate was stable at 45%. Indicating that illegal operators enjoyed an up-tick in spend per customer.

The research found that Google searches were the primary source of new customers for unlicensed operators. Although the search engine had altered its algorithm to reduce the number of black-market operators returned, which had seen a reduction from 12% in 2018-19 to 5% in 2020, 98 offshore gambling sites were returned in the first ten pages of Google search results.

“Overall, our analyses have found that usage of and spend with unlicensed online gambling operators in the UK has grown over the last one to two years,”

“This has occurred despite awareness of unlicensed operators remaining broadly stable and consumers’ exposure to unlicensed operators within Google search results declining.” the PwC report concluded.

However, Miller seemed to offer an olive branch to the industry and had a much more conciliarity tone in his keynote, saying:

“The Gambling Commission is alive to this danger and regularly takes action to cut off or shut down these sites,” said Miller.

“With rapid changes in technology, we know we need to be increasingly fleet of foot and may need a broader range of tools to tackle emerging risks.

“We are pleased that the Gambling Act 2005 review includes a focus on the powers and resources of the commission. “Industry and others are right to flag the risks that can come from the black market, but the solution to tackling that black market is not to cease taking action to make regulated gambling safer.

“We won’t legitimise poor practice at home through fear of what might be happening elsewhere.

“Making gambling safer and keeping crime out of gambling are not mutually exclusive, and we will continue to pursue both of those objectives rigorously,” Miller added.

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