The illegal gambling black market poses one of the greatest threats to legitimate operators, new data reveals. In 2024, a staggering 71% of all bets placed in Europe went to black market operators.
That, in pure financial terms, is a total betting handle of some €80.6 billion (around £70 billion) that unlicensed firms have taken away from the legal sector.
Fuelling the Growth
It seems increasingly likely that the UK chancellor, Rachel Reeves, will increase the amount of tax paid by gambling firms later this year. Although the percentage rise may ultimately prove to be single digits, in real terms that’s millions wiped off balance sheets and lost in shareholder value.
That will have a considerable impact upon the sport of horse racing, but also for punters as bookmakers tighten their belts by removing promotions and concessions and perhaps increasing their betting margins – forcing many to seek better value odds with unlicensed firms.
Some Treasury insiders are calling on Reeves to consider the implications of gambling tax rises – particularly when viewed through the prism of the rise of the black market on European soil. That reached all-time highs in 2024, with more than two-thirds of all bets placed on the continent going to unlicensed operators.
Back in July, the European Gaming and Betting Association (EGBA) produced their Sustainability Report, in which they revealed the extent of the black market issue – particularly in countries like the Netherlands, where tightened regulation has hit licensed operators hard. The report reads:
In the Netherlands, new spending caps introduced in 2024 prompted a surge in black market activity. Within just months, unregulated sites were matching the revenue of the country’s regulated market.
The UK doesn’t feature in European Union data anymore, of course, but it’s estimated that around 1.5 million British people are betting regularly with black market bookies – spending around £4 billion in the process. Speaking about the spectre of unlicensed gambling, the Betting and Gaming Council (BGC) chief Grainne Hurst commented that the chancellor’s expected tax rises would ‘fuel the growth’ of the black market sector in the UK, too. Hurst said,
This worrying research underlines the very real threat posed by the growing, unsafe gambling black market.
The founder of Yield Sec, who captured the unregulated sector data, believes that it’s time that all stakeholders in gambling got together to eliminate the black market. Ismaeli Vali said:
Crime is going to continue to thrive in the absence of monitoring, policing, enforcement and optimisation. It is up to legal stakeholders to learn to work together.
Black Hole
Although some will revel in licensed UK gambling firms missing out on huge profits, there are genuine issues caused by the black market – with the humble punter most likely to suffer. Unlicensed firms don’t have to uphold the same standards of care as bookies regulated by the UK Gambling Commission, who demand that their licensees offer safer and responsible gambling tools to their customers.
Black market bookies also have no obligation to declare how they keep their customers’ funds safe, nor what protections are available to punters should the bookmaker go bust. In reality, there’s nothing to stop an unlicensed firm from simply disappearing overnight… taking customer funds with them.
Black market operators also have no obligation to funnel their revenues back into the UK. They are untaxed, of course, and do not provide any funding to the same channels as legitimate enterprises – that is, to grassroots sports and to horse racing via the betting levy, nor to the financing of research and treatment into problem gambling.
Black market firms may act as ‘soft’ bookmakers, offering better odds and lower margins than their legitimate opposition. However, most worryingly, they will allow punters that have self-excluded themselves from licensed bookies to create accounts and bet without any background checks being undertaken.
The introduction of so-called frictionless financial checks in the UK sector has already caused a number of large stakes punters to seek out unlicensed firms – typically in Europe and Asia – that will lay their bets without imposing limits on their accounts.
According to a British Horseracing Authority (BHA) survey, the number of unique visits to black market betting sites between January and September 2024 rose by 522%, compared to the same period a year earlier. The number of black market punters in the UK has swollen to the point that the Treasury is now missing out on around £500 million in tax revenue it might have otherwise generated from legal sources.
In an age when ministers are looking down the back of the sofa for spare change in the wake of decades-high government borrowing, how valuable would that tax revenue be?