82% of UK Players Believe New Restrictions Will Fuel the Online Gambling Black Market

BGC warns the UK government again – the online gambling black market will rise if its white paper is too restrictive for players & operators. (Photo by geralt on Pixabay)

Is the UK government on the same planet? What goes through the mind of these ministers? And how can a country get so many things so wrong so consistently? It’s not just gambling. The country is a mess. And it is something companies operating in the UK gambling industry cannot escape.

UK gambling laws are still up in the air, but rumour has it that the new white paper could ban free bets. Surprisingly, and welcomed the news, the Betting and Gaming Council (BGC) is advising UK ministerial bigwigs against taking such a tough stance.

The advice comes as a result of a survey carried out by YouGov. When asked whether online gambling sites should be allowed to offer free bet bonuses, an overwhelming majority of 82% said it should be the operator’s choice. A more worrying stat is that 54% said it would likely lead to more UK gamblers heading to what is labelled as the ‘Online Gambling Black Market’.

Sadly ‘free bets’ are not the only promo type on the British government’s strike list. There could be an all-out ban or severe restrictions placed on promotions betting sites and UK online casinos can offer.

Are you a UK player: Read my news piece on the UK government’s plan to destroy another billion-sterling industry. It’s in their veins. The mindset – let’s do something, then realise we were wrong later. The UK government continues to make mistake after mistake. When will it end?

Could it get any worse? Yes – BGC is also issuing a warning over planned tax hikes

I mean when I read the news about the UK, my jaw just drops. Here’s another blunder waiting in the pipeline, and that is new taxes and higher tax rates the UK online gambling white paper could bring. Whether this will happen or not, I do not know, but the mere mention of it sends a shiver down my spine.

In a recent news report by the BCC, CEO Michael Dugher warns against anti-growth tax rises.

Chancellor Jeremey Hunt must have the entire nation quaking in its boots as another budget announcement is about to come out. Of course, most UK citizens know these budget announcements are just a matter of procedure. The end-of-year figures in comparison are never the same. However, there is one area that sticks to its guns, and one that can make or break businesses, and that is tax.

We are already seeing most gambling companies reporting dismal financial stats, and most of them cite the same reasons. Increased costs to satisfy responsible gambling and social responsibility rules in the UK. That’s fair enough. No one can argue that players need more protection when the tech is there to help achieve this. However, a rise in tax would be a double whammy.

Worst case scenario: The government raises gambling taxes, which will result in more operators exiting the UK market, and job losses in tech, marketing, recruitment, customer service and the casino industry itself. Counterproductive to say the least.

Online Gambling Black Market on the Rise According to RacingTV Member Survey

In the same BGC news report, there was mention of a survey conducted by RacingTV. 3,500 members participated and a staggering 15% said they know someone who is currently using a black market online gambling site. Adding to this, 80% were against restrictions on their spending.

This also stems back to an earlier news report here on CasinoPlusBonus.com that covers a research study revealing 250,000 UK players visit black gambling sites. To make matters worse, another study published by the BGC shows that the number of UK casino players and sports book enthusiasts rose from 210,000 up to 460,000 between 2019 and 2020. This is just the number of players. Over that time, bets made by these punters on these unregulated gambling sites rise into the billions – with a ‘B’.

Well, if there are billions in Sterling leaving the UK, how much tax revenue is lost? As the BGC reports say ‘billions’ (plural) let’s take 2 billion as an estimate. Let’s say players won back half of that. This leaves a GGY of 1 billion sterling for UK gambling companies.

I then asked ChatGPT 4.0 for its estimate and here’s what are AI friend (or enemy) had to say:

To determine the tax revenue the British government loses due to gambling outside the UK, we need to know the Gross Gambling Yield (GGY) and the gambling tax rate in the UK. The GGY is the amount retained by operators after paying out winnings but before deducting operating costs. The tax rate on GGY varies depending on the type of gambling and the specific regulations in place.

As of my knowledge cutoff date in September 2021, the Remote Gaming Duty (RGD) for online gambling was set at 21% in the UK. Assuming the 1 billion Sterling gambled outside the UK would be subject to this tax rate if it were gambled within the UK, we can calculate the potential tax revenue loss as follows:

1,000,000,000 (1 billion Sterling) * 0.21 (21% tax rate) = 210,000,000 Sterling

The British government would potentially lose 210 million Sterling in tax revenue. Please note that tax rates and regulations may have changed since my knowledge cutoff date, so it’s essential to verify this information for the most accurate calculation.

Is anyone listening? I really don’t think they are. But I have been wrong. There is a lot of pessimistic speculation out there. However, once the white paper hits, it may not be as bad as we think. Especially as much of the news regarding the rise of an online gambling black market must have the government worried.