Industry Commissioned Report Warns Against Black Market Appeal

by Glenn Baird - October 30, 2019

A report written by PwC that was commissioned by Ladbrokes Coral's parent company GVC Holdings and William Hill has revealed findings that suggest an over-regulated industry could lead to an increase in the numbers accessing illegal, unlicensed and unregulated gambling.

The report estimates that black market gambling is worth roughly 1.4 billion pounds each year, making up 1.2% of the overall market.

The report concluded that this could be a result of increased regulatory changes, that it argues may have driven some gamblers away from licenced operators.

A summary of the report was publish in the Racing Post online stating that: "Further regulation may lead to frictions in the customer experience [...] and drive gambling further into the black market,"

The report is made up of findings that were gathered in 2018 involving more than 3000 gamblers. PwC partner Andy MacGilp said:

"Many of those frictions in the gambling industry are very good ones and are there for good reason to protect consumers and protect the industry, so we are not saying they should be removed, but I think we are saying the relationship between their existence and potentially unintended consequences is something that needs to be carefully considered."

He then went on to add:

"Anything which causes a source of friction for a consumer in terms of their journey is a potential catalyst to someone seeking a new operator and a potentially unlicensed operator.

"If they can't get the bets on they want, or they have to prove source of funds or they just can't play the products they want, I think those are all reasonable hypotheses as to why someone would go to a different operator."

The report claims that 2.2% of all gamblers have accessed illegal black market gambling, a total which amounts to 200,000 people.

The interim chief executive of the Betting and Gaming Council, Wes Himes states that:

"Operators are committed to raising standards in education, prevention and treatment of problem gambling – and to do that we accept there will be regulatory changes," he said.

"Lessons from elsewhere in Europe show it is a delicate balance of creating friction points with players and the risks of players moving to unprotected environments."

The UKGC have responded to the report and its findings by stating:

"The gambling industry needs to focus its energy on raising standards to make gambling fairer and safer for British consumers. We will continue to work with many other organisations to take swift action to tackle unlicensed illegal operations."

Any conclusions that could be drawn have to include the fact that the full report has not been published yet and there should also remain questions surrounding its impartially, given that it was commissioned by some of the biggest hitters in the UK gambling industry.