Casinoplusbonus Luke Webber dissects a report by Regulus Partners backed by Entain giving stats and a plan to fight black market gambling. (Image courtesy of Entain)
An interesting new report on the Entain website outlines black market online gambling stats. The report additionally outlines plans to tackle black-market gambling websites.
Cracking Down On Operators With No Licensing
The report highlights begin with four bullet points:
(1) Countermeasures to crack down on gambling operators, no licensing
(2) A blacklist of operators to restrict marketing and financial transactions
(3) Policy tools specifically for the UK to prevent the government from losing £335m in taxes before the next election.
(4) A warning that governments should not ignore black market operators.
Regulus Partners’ new plan has been designed with the support of Entain. Entain itself is a company I report on often via my monthly stocks report, which you can read via the Casinoplusbonus Economy News category.
Of course as soon as a legitimate gambling company is behind the statistics of a report, it does make me skeptical. The action plan will clearly help Entain, which in previous news declared that it would pull out of all regions where proper licensing isn’t in place.
If governments, such as the UK, do take on some of the suggestions in the Regulus Partners report, Entain’s competitors will also benefit. Also, after comparing the Regulus Partners research with another study carried out by Frontier Economics and published by the British Betting and Gaming Council (BGC), I trust both studies have issues what they believe to be accurate data.
Source: All the information sourced to create this news piece came via the Entain website’s news section – Plans to Tackle Black Market Gaming Operators.
Consolidated Data From the Regulus Partners Report
| Category | Statistic |
|---|---|
| UK Estimated Black Market Stake | £4.3bn in stakes |
| UK Annual Black Market Tax Gap | Up to £67.7m |
| Projected Tax Gap Over Next Parliament | £340m |
| Regulated UK Industry Economic Contribution | £7.1bn |
| Regulated UK Industry Tax Contribution | £4.2bn |
| Jobs Supported by Regulated UK Industry | 110,000 jobs |
| France Black Market Revenue Proportion | 45% of total gambling revenue |
| Germany Black Market Revenue Proportion | 60% of total gambling revenue |
| Age Group Most Likely to Use Black Market | Under 35s (two-thirds of stakes) |
| Key Proposals to Tackle Black Market | 1. Blocking payments 2. Restricting media ads 3. Blocking IP addresses 4. Criminal enforcement 5. Public blacklist |
| Purpose of Tackling Black Market | Improve player protection, tackle crime, raise revenues |
Casinoplusbonus Regulus Partners and Entain Report Analysis
The figures in the table speak for themselves. The market I am most interested in is the UK, naturally, because here on Casinoplusbonus, we have two UK gambling industry experts.
UK Tax Revenue Losses Could Rise to £340 Million Per Year
The current Regulus Partners report says that the UK itself is losing close to £70m per year in tax revenue. Now, I’ve seen the recent analysis by Jack Bannon analysing a similar report carried out by Frontier Economics and published by the British Betting and Gaming Council (BGC).
Reading Jack’s recent report ‘UK Unveils Billion Sterling Black-Market Gambling Problem‘, he mentions that the UK’s black market gambling problem is likely worse than all these organisations realise. I fully trust Jack’s judgements because he is in the trenches when it comes to UK gambling, as he plays in land-based casinos and online when he is living there in the summer months.
In his report covering the Frontier Economics research covered by the BGC, Jack mentions that 2 out of 5 of his friends in the UK gamble on black market crypto casinos. Therefore, both Frontier Economics stats and Regulus Partners reports, although helpful, are underestimating the stats.
From Jack’s analysis, an expert on the ground in UK gambling, revenue losses of £67.7m due to black market gambling in the UK predicted reported by the Regulus Partners are likely to double. However, The rise to £340m, I presume, over the next 4 years, is a figure I can agree with.
My Suggestion: Entain and Regulus Partners should team up with Frontier Economics and the BGC to rehash their research to find commonalities and holes in their research. We here at Casinoplusbonus feel they’ll be in for a surprise just how prevalent black market gambling is in the UK.
Measures to Prevent Players Accessing Black Market Gambling Sites
I am of the opinion that Entain has predicted the huge backlash about to hit the UK gambling market due to the new White Paper rules modifying the UK Gambling act. Online slot limits and affordability checks are just the tip of the iceberg.
There is also the inability for UK online gambling sites to compete with black market sites. This is due to the rising costs for operators to continue making a profit to justify renewing their UKGC licence–costs black market online casinos don’t have and translate to offering better bonuses and odds to their members.
As a result, the Regulus Partners report backed by Entain is an effort to open the UK government’s eyes and take action against these non-licensed operators. As per the table above outlining the results of the Regulus Partners report, there are several suggestion to prevent players from access black market online gambling sites.
Will these Preventative Measure Work?
Although I agree with each method suggested and they should be implemented as standard, I don’t think they will have a tremendous effect on preventing black market gambling.
- Criminal enforcement: I just don’t think the UK has the budget to chase down black market operator overseas. Maybe investing a few million to chase down these operators to save a large portion of the predicted £340 million predicted in tax losses is an incentive.
- Blocking IP Addresses: Too many UK citizens know about crypto gambling sites now. Even if they don’t they will eventually hear about them from friends. Players will turn to VPNs if sites are blocked, and as crypto adoption continues to rise, so will UK players’ demand to play at crypto casinos.
- Blocking Payments: This I think is a great idea if the UK government weaponises to fight black market online casinos. It would need to deeper than fiat currency payment systems though.
- Public Blacklist: I just think this will advertise crypto sites to those that don’t already know about them. Ever heard of curiosity killed the cat?
- Restricting Media Ads: This is easy enough on the one hand as Google, Yahoo, and social media will need to toe the line and make sure blackmarket gambling sites are filtered out of their system. However, it won’t work for those that use VPNs.
Overall, I found the Regulus Partners study and suggestions interesting. The companies involved are on the right track, but there is a lot of hard work down the road to come regardless of whether the financial stats are correct or not.
Nice report, Luke. I agree with what you say. I am sure they are, not on purpose, getting stats that don’t truly show how big an issue black market gambling is in the UK. Also, one of the main points I was making in my news report is that none of these studies seem to highlight that crypto is perhaps the main reason people want to gamble on black market online casinos. It feels like they are swerving the topic.
If the UK really wants to get those taxes in, it will start to adopt cryptocurrency, allowing operators to offer crypto betting. I also made the same point in a news report following that – https://casinoplusbonus.com/en/over-regulation-the-reason-for-the-uks-growing-black-market-online-casinos-2503/.