Gambling With UK’s iGaming Future, More Control May Only Abet Dark Web

As the campaign to shape the future of the gambling industry intensifies, the big guns of British betting are warning that tougher controls on legal betting may only have the undesired effect of driving more and more punters into the illicit underground market.

According to a new report–“The Review of Unlicensed Online Gambling in the UK”–by forensic accountants Price Waterhouse Cooper (PwC), the handle of “offshore” iGaming has doubled to around £2.8bn since 2018; with an estimated 460,000 punters regularly betting on nefarious websites.

The PwC report was commissioned by the UK’s gambling industry trade body, the Betting and Gaming Council (BGC), and its findings are fully supported by betting giants William Hill and the Entain Group, formerly GVC Holdings, among other heavy hitters.

Published amidst the government’s ongoing Official Review of the 2005 Gambling Act, the study warns, unequivocally, that “major changes” to betting laws or regulations “may have a significant impact” on “unlicensed play” – for the worse.

The PwC survey is based on questioning 2,363 British gamblers in November and December last year.

It concludes–after forensic examination of their betting habits in the previous 12-months—that changes such as ‘Affordability Checks’ could lead to more than 30 per cent of gamblers moving to new, illicit, operators; ‘Monthly Stake Limits’ might push 18 per cent of players to shift elsewhere and ‘Maximum Slot Stakes’ could prompt 27 per cent of punters to transfer their action offshore.

And its report of underground iGaming activity was probably an underestimation, given the plethora of smaller, lesser-known, illicit betting sites, cautioned PwC.

Their estimate of illegal verticals making-up approximately 2.3 per cent of online spend substantiates a 2017 European Commission survey, which calculated that around two per cent of all bets wagered were placed with illegal offshore sites.

Illegal gaming must be considered a “meaningful issue” for the industry, stresses the report, as these sites pose a risk to player protection, tax collection and the battle against match fixing and money laundering.

Perhaps most contentiously, the report claims that the illegal online betting market is bigger in countries—such as France, Italy, Norway and Spain—which have tougher gambling laws on licensed operators.

Speaking with the Review of the Gambling Act in clear mind, BGC Chief Executive Michael Dugher said: “This new report by PwC is an impressive and comprehensive piece of work which demonstrates how the unsafe, unregulated market is a growing threat to British punters.

“The UK risks sleepwalking into changes where the main beneficiary is the unlicensed illegal market.

“We all have an interest in getting future changes right, so must take heed of this latest evidence and look at what is happening elsewhere around the world.

“I know this evidence is inconvenient to those who seek to dismiss and play down the threat of the illegal market, but there is a real danger of complacency.”

William Hill CEO Ulrik Bengtsson stressed, in turn, that the gambling review must be “led by the evidence” and fully supported the argument that tougher measures would only boost the illegal betting market.

“Unlicensed operators do not offer the same protections as licensed companies. They do not have any of the safer gambling protocols in place that we use, there are no age verification checks, no anti-money laundering precautions, or any of the consumer protections that are now standard in the industry,” said Bengtsson.

“There have always been illegal bookmakers, in Britain and elsewhere. [But] what makes the current threat so pernicious is its ability to exploit technology [and] to make itself more available to gamblers. Now, a person on a legal betting site is only a few clicks away from an illegal option.”