UK Gambling Operators Criticized for Overstating Black Market Threat

The UK regulatory body said a recent report from PwC exaggerated the size of the unlicensed gambling market in a bid to soften the upcoming changes in the gambling law.

Gambling Operators in an Attempt to Prevent Tighter Regulations

The UK Gambling Commission (UKGC) has criticised some gambling companies for preparing a “dodgy” report about an expanding UK gambling black market shortly before the review of the 2005 Gambling Act. The review is expected to be the biggest change in the country’s gambling laws since 2005 up to date.

The report that faced backlash was written by consultancy firm PWC and claimed that  around 200,000 bettors spent £1.4 billion on illegal gambling operators over a 12 month period between 2018 and 2019. The report also warns against more stringent regulation as it could drive more people into the arms of “unscrupulous” operators.

However, Neil McArthur, Chief Executive of the Gambling Commission, opposed such claims in a letter to a cross-party committee of MPs examining gambling-related harm, as reported by The Guardian. McArthur said the report was “not consistent with the intelligence picture” and was in sharp contrast with the findings of a research conducted by the UK regulator itself.

“We know that licensed operators and their trade bodies are concerned about the impact of the illegal market, but our own evidence suggests that the impact may be being exaggerated. In any event, we are not convinced by the argument that suggests that raising standards in the licensed market will prompt consumers to gamble with illegal operators.”

Neil McArthur, Chief Executive, UK Gambling Commission

The report was used by various industry figures to raise their voice against the upcoming tighter regulations, which might include a ban on football shirt sponsorship, stake limits and affordability screening of customers. Brigid Simmonds, chair of the Betting and Gaming Council, the industry’s trade body, joined the criticism against the gambling reform saying that too much red tape would push punters towards the black market.

The horseracing industry also fears the financial implications from the proposed affordability checks.

PwC Figures Are Inconsistent with the Gambling Commission’s Findings

According to UKGC data, just 182 out of the 26,212 queries it received through its contact centre in 2020 were related to illegal online gambling. The regulatory body also highlighted that PwC’s independent report does not differentiate between transactions carried out by consumers and automated activity by bots and other tools, hence it should be read with cautiousness.

Despite the industry’s negative reactions, MPs are going forward with the review into gambling regulations. Labour MP Carolyn Harris, Chair of the All-Party Parliamentary Group on Gambling Related Harm said that the online gambling industry is trying to magnify the threat of the black market in an attempt to stop regulation and protect its profits, but this tactic would not prevent the increase of standards in the sector.