A new study published by the Betting and Gaming Council (BGC) has revealed that £2.7 billion is spent on illegal gambling every year in the UK. That’s equal to 2.1% of the £128 billion staked with licensed online operators annually.
However, the Betting and Gaming Council warned that the real figure could be far higher than the sum proven through its research.
If in-person gambling, and informal gambling such as poker games, had been included in the calculations, the BGC stated that the total spent on unlicensed bets every year in the UK could be up to £4.3 billion. This would represent 3% of the overall industry.
A £335m tax loss over 5 years
The research, commissioned by the BGC and written by Frontier Economics, was carried out in order to improve understanding of how gamblers in the UK use illegal sites. It's the first major study on illegal gambling in the UK since May 2023.
Analysts used data from 6,000 gamblers, with those who play casino, bingo, and sports betting all included.
The results of the survey were stark. A total of 5.4% of respondents said they used both regulated and illegal operators in the UK, with 0.8% stating that they bet on illegal sites exclusively.
The study found that awareness of illegal sites was high, with 15% of respondents stating that they had heard of at least one illegal brand. The rise of illegal gambling advertising on social media is thought to be a key contributor to this trend, with 22% of respondents saying that they had seen black market advertising on social channels.
Respondents were asked about the reasons for their use of illegal sites. Of those surveyed, 35% cited generous bonus and free bets as a key factor in their decision. Similarly, 32% were tempted by the ease of setting up an account, while 30% had used illegal sites as they had better odds.
Researchers found that 12% of the spend by those who used both illegal and legal sites went on illegal gambling sites. The amount spent by those who solely used illegal sites was estimated at £695 million annually. If these figures prove representative of all UK players, it would mean a tax loss of up to £335 million over a five-year period.
Calls for action in the fight against illegal gambling
Grainne Hurst, CEO of the BGC, said that the survey exposed “the unnerving true scale of the growing, unsafe, unregulated gambling black market.”
Calling for more creative measures to combat the rise of illegal gambling, Hurst said that regulators were at risk of “sleepwalking into the issue.”
“Simply giving the GC [UK Gambling Commission] more powers and more resources to tackle the black market won’t in itself, work. Enforcement is only part of the solution,” Hurst said.
The concern is that tougher regulation could in fact contribute to a more significant rise in illegal gambling, with gamblers more likely to seek out illegal sites to avoid new measures.
Hurst referenced recent government proposals, which include curbs on gambling advertising and affordability checks, in her statement. At present, these measures are being tested by the Gambling Commission.
A change in government could mean a change in direction
In July, the UK elected a new government, putting a halt to many of the measures advised in last year’s gambling white paper. Lobbyists are now putting a host of cases forward in the hope of shaping the gambling legislation of the future.
The planned £2 digital slot machine limit and £100 million mandatory levy on the industry to fund education and treatment of those facing gambling addiction are now on hold, with industry insiders awaiting a decision from Prime Minister Keir Starmer’s government on new proposals.
“We recognize the impact harmful gambling can have on individuals and their families and we are absolutely committed to strengthening protections for those at risk,” a government spokesperson said.
