There’s a cause-and-effect relationship in the gambling industry that is making many sector stakeholders increasingly nervous: the more you make licensed betting unfavourable, the more likely it is that punters will seek out ‘black market’ bookmakers.
And in an age of digital innovations like WhatsApp, it’s becoming easier and easier for unlicensed ‘bookies’ to build their customer base simply by sending out promotional messages via the ubiquitous messaging app.
So what can be done about that; particularly in the light of enhanced affordability checks? Many punters don’t want to provide their private data to gambling operators, and they certainly won’t be happy with the idea of so-called ‘frictionless’ credit checks being performed on them.
The Gambling Commission’s CEO, Andrew Rhodes, is sympathetic to the plight of punters and bookmakers alike in an age of tightening regulation. And he’s identified a number of ways in which the regulator can play its part in warding off the threat of black market betting firms.
Black Market Backlash
On Monday, Rhodes spoke at the annual International Association of Gaming Regulators (IAGR) Conference, while a supporting blog post was published on the Gambling Commission website.
He reiterated one of the regulator’s key principles – to prevent gambling from becoming a ‘source of crime’, which of course is the case when black market and offshore firms offer betting odds and casino games without the requisite UK licence.
These operators may also pose more of a risk to punters, especially those that would be classed as ‘vulnerable’, while also undermining the strides that legitimate bookmakers and betting sites have made in tidying up the industry’s collective act when it comes to social responsibility, tackling crime and promoting an environment of responsible gambling.
According to Rhodes, since April 2024 the regulator has issued some 750 Cease and Desist orders to those operating a gambling business on UK soil without the requisite licence.
The Gambling Commission has also taken their battle to Google, calling upon the search engine to remove thousands of listings of illegal operators from its pages. So far, more than 50,000 URLs belonging to unlicensed firms have been erased by Google; an increase of some 1,000% compared to the ‘takedown’ data of 2023.
During his keynote speech in Italy (nice work if you can get it), Rhodes asked a rhetorical question that the regulator has now taken additional steps to tackling:
“If we are to be able to tackle the problem of illegal online gambling, we need to understand more about how its impacting the public. How many are currently using illegal sites and why?”
The answer may come from a qualitative study that the Gambling Commission has rolled out. As part of the survey, the regulator aimed to find out why punters were using black market sites; as opposed to the dozens of licensed firms legally operating on UK soil.
They will aim to return with the results in 2025, but for now the regulator is hypothesizing that punters seek out black market firms to circumnavigate KYC obligations, or because they have already self-excluded from licensed firms via GamStop.
However, the survey will not examine a causal link between enhanced affordability checks and black market activity, which many would agree means that the Commission is missing a trick as it looks to clamp down on illegal betting providers.
White Label Woes
Another grey area of the gambling industry that the regulator has been keeping a close eye on are the so-called ‘white label’ operators.
These firms, typically based in an ‘offshore’ – but UK recognised – location like the Isle of Man, are able to secure licensing without necessarily having to pay the same level of tax as operators headquartered domestically; which rather undermines the competitiveness of the industry.
White label operators are also acting as licensing gatekeepers to bookmakers based overseas – and this is particularly the case with firms that are sponsoring Premier League football clubs without having a UK presence themselves.
A number of Premier League outfits, including Aston Villa, Fulham and Nottingham Forest, are sponsored by operators that seemingly have little interest in setting up a UK-facing website.
Aston Villa and Kaizen Gaming are delighted to announce a new long-term partnership that will see Betano become the club’s new principal and front-of-shirt partner.
— Aston Villa (@AVFCOfficial) April 22, 2024
Why? Because they simply want to piggyback on the huge TV audiences that Premier League games get worldwide to promote their services to a particular market; typically in Asia.
But a new survey has found that a number of these deals are breaking the Premier League’s rules, with some clubs (Aston Villa, Brentford, Everton, Fulham, Nottingham Forest and Southampton) still not offering a sponsor-less shirt for children – or an alternative shirt for adults with no gambling logos – at retail.
As per the Code of Conduct for Gambling Related Agreements in Football, which was agreed in collaboration between the Premier League, EFL and FA, Rule 3.5.1 decrees that it is prohibited to have ‘gambling sponsorship logos (both front of shirt and sleeve) on replica kits designed for children.’
And Rule 3.5.2 declares that clubs must: ‘Ensure that mechanisms exist to enable supporters to have the ability to purchase adult replica kits that do not include gambling sponsorship logos, in the event that they are not otherwise available for purchase.’