The Betting and Gaming Council (BGC) issued a warning to the UK Government ahead of the release of its White Paper the industry is at a dangerous crossroads, citing research on black markets in other European countries following the introduction of strict new gambling measures.
Gambling Industry at a ‘Dangerous Crossroads’
The BGC that was particularly vociferous during the lockdown periods, defending the interests of its members, raised its concerns based on research findings that black market share has substantially increased in numerous European countries, including Norway, France, Italy, Spain, Denmark, and Sweden as a result of more stringent measures imposed on licensed operators.
The findings of the research ordered by the BGC were in line with the increased use of black market gambling websites in the UK, where the number of British punters turning to illegal gambling websites more than doubled to 460,000 from 220,000 in just two years, resulting in the siphoning of billions of pounds out of the regulated industry.
“We support the Gambling Review but there is a real danger that it leads to the regulated industry being smaller and the illegal black market growing substantially,” BGC chief executive officer Michael Dugher said, stressing the “dangers of the black market” and the opportunity to “learn lessons from abroad” to make the “right choice” at this moment when the gambling industry is at a “dangerous crossroads.”
“BGC members alone employ nearly 120,000 people and pay £4.5 billion in tax in the UK. The black market, of course, pays no tax and employs no one in our country.”
Michael Dugher, CEO, BGC
According to a report for the BGC prepared by PricewaterhouseCoopers (PWC), the UK that is currently offering a less restrictive gambling market has a smaller share of black market operations as compared to other European countries with more restrictive regimes, concluding that “jurisdictions with a higher unlicensed market share tend to exhibit one or more restrictive or licensing characteristics.”
Restrictions Benefit Unlicensed Operators
Research on one comparable market, Norway, showed that upon the introduction of a state monopoly, stake and advertising restrictions and affordability checks, the country experienced an increase in black market share to 66% of all money wagered. In France, another comparable country with a state monopoly, illegal wagers account for 57% of the total market.
Countries that banned gambling advertising like Italy and Spain have illegal gambling market shares of 26% and 20%, respectively, while Denmark, where restrictions on bonuses and loyalty rewards schemes were imposed, recently reported an increase in black market share of 9%.
On the other hand, a national survey in Sweden uncovered the ineffectiveness of self-exclusion as a protective measure as 38% of the respondents stated they were still able to gamble with unlicensed operators despite having self-excluded themselves from the regulated market.
“Any shift to the unsafe black market would also jeopardise the £350m a year which our members currently give to horseracing in sponsorship, media rights and the betting levy – financial support which has proved crucial during the pandemic.”
Michael Dugher, CEO, BGC
The BGC is requesting the UK Government to learn from the European experience and consider targeted measures that will protect people at risk, instead of a blanket approach that will force the majority of gamblers to unlicensed operators.