A staggering new report into the scale of the UK’s gambling black market has revealed that £16.6 billion is now being wagered with unlicensed operators – growth of by more than 300% since 2019 alone.
The research conducted by H2 Gambling Capital (H2GC) also reveals that stakes doubled in size between 2023 and 2025, as did operator profits… highlighting the acceleration in bets being placed in the illegal sector.
And those bombshells come amidst the backdrop of the findings of the National Institute of Economic and Social Research, who claim that stringent regulation changes – such as proposed financial risk assessments – could see one in five punters turn to the black market.
Black Hole
Back in 2019, estimates placed the value of the UK’s gambling black market at around £5 billion.
Perhaps alarm bells should be ringing then as the data published by H2GC reveals that unlicensed turnover has now reached £16.6 billion.
An alternative way of considering the scale of the issue is that the percentage of bets being placed with legal, licensed operators had fallen from 97% in 2019 to 92% last year.
It is becoming an increasingly lucrative field for individuals willing to take bets via social media channels like WhatsApp – without the cost or the scrutiny of securing a licence from the UK Gambling Commission.
That in turn explains why the amount being spent on advertising by black market firms has also skyrocketed – with the anticipation that it will hit £19 billion a year by 2028, as per the World Advertising Research Center (WARC), which would be a higher ad spend than the regulated sector.
And getting access to illegal betting sites is becoming increasingly easy – thanks to free AI assistants. A test performed by the Racing Post this week revealed that chatbots like ChatGPT will recommend the names of unlicensed operators when prompted correctly.
The government will provide the Gambling Commission with an extra £26 million to tackle the black market, whose growth has come about partly due to the controversial policies implemented by ministers.
Amongst those include the possible introduction of financial risk assessments, which are expected to be given the green light in the coming days.
There’s no shortage of opponents of the scheme, which would see a background check performed on punters that lose £1,000 or more in 24 hours… or £2,000 or more in a rolling 90-day window.
Flutter’s CEO Peter Jackson commented that the Gambling Commission’s pilot study did not conclusively find that ‘frictionless’ checks could be performed, and that if they were introduced in their current form would ‘only help the illegal market.’
Jackson is understandably keen to preserve the interests of legal operators. Flutter this week revealed their results for the first quarter of 2026, with their revenue guidance downgraded after what the firm describes as ‘punter friendly sports results’.
And Flutter dropped another unexpected bombshell by revealing they could completely delist from the London Stock Exchange.
One In Five
While the findings of the H2 Gambling Capital study are alarming, the report compiled by the National Institute of Economic and Social Research (NIESR) should also be a cause of great concern for industry stakeholders and the regulator alike.
In amongst their research, the think tank confirmed that if rules like financial affordability checks are introduced, around 18% of punters – roughly one in five – would ‘sometimes’ feel compelled to use a black market betting site.
And of the same study group, another 8% would consistently use illegal operators in order to bet without the checks being performed.
According to the Betting and Gaming Council (BGC), that 8% would account for around £625 million in taxable gambling revenue lost offshore each year.
“This report is a significant warning about the unintended consequences of excessive gambling regulation,” a BGC spokesperson commented.
“Significantly, these findings come from academics long associated with anti-gambling views, and from research funded by the Gambling Commission itself.
“At a time when the government is rightly focused on economic growth, jobs and protecting tax revenues, it would be deeply short-sighted to press ahead with further measures which risk driving customers away from the regulated market and into the arms of the criminal black market.”
The regulator’s executive director, Tim Miller, has claimed that much of the discourse around financial risk assessments is ‘ill informed or inaccurate’.
According to the Gambling Commission’s pilot study, Miller believes that fewer than 3% of punters will be impacted by the checks, with around 97% of the assessments performed done so in a ‘frictionless’ fashion, with no additional information needed to be sought.