Research has found teenagers are spending huge amounts of money on black market gambling, leading to suggestions regulation of the industry needs to be amended.
A report that was recently released by the respected accountancy group PwC found that black market sites accounted for around one in 10 gambling search results online.
This contributed to teenagers spending as much as £1.4 billion – which works out as nearly $2 billion – on black market online gambling, according to the study.
But doubt has been cast on the accuracy of the figures, with some industry experts suggesting the report was a “dodgy dossier” compiled to influence an upcoming gambling review in the UK.
The UK Gambling Commission’s chief executive, Neil McArthur, said the PwC report was “not consistent with the intelligence picture” and suggested some searches were by bots.
Legitimate online gambling businesses have to meet certain quality standards which such sites don’t which make them extremely dangerous to gamble at. Is black market gambling a big problem – and if it is, what needs to be done about the issue?
Gambling online on the rise
It is not in doubt that online gambling has seen a big spike in popularity in recent years. The trend was hastened in the last 12 months as a result of many land-based bookmakers and bricks and mortar casinos having to close their doors due to the COVID-19 pandemic. A lot of players preferred to surf the net and find the best British online casinos using different review sites. It helped them minimize the risks of loosing funds.
According to data from the Gambling Commission, between April 2019 and March 2020, Britain’s total gross gambling yield (GGY) stood at a whopping £14.2 billion. An example of such a business would be sbobet.
While this demonstrated a drop of 0.6 percent on statistics from the previous 12 months, remote sector GGY increased by more than eight percent to a total of £426.3 million.
The PwC report said 200,000 people had staked a total of £1.4 billion on unregulated online gambling sites in 12 months. It was also claimed that 27 million visits in total were to unregulated sites – 2.5 percent of all visits to betting websites.
Responding to the data, the Betting and Gaming Council’s chief executive Michael Dugher, a former MP, warned the government of the dangers of getting their gambling review wrong.
“These figures demonstrate the danger of unintentionally driving punters into the arms of the illegal, online black market – which offers none of the protections of the regulated sector,” he said in an official statement.
Is the PwC data accurate?
There is no doubting the scale of the gambling industry in Britain. It employs 100,000 people with more than £3 billion paid to the Treasury in tax each year as a result.
But the impact of black market gambling sites is hard to quantify and the Gambling Commission (UKGC) has suggested they are not used as often as the PwC report claimed.
“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,” said UKGC chief executive Neil McArthur.
“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.”
It has also been reported that the study into black market sites was commissioned by a trio of online gambling companies, casting doubt over its accuracy and relevance.
Black market gambling in America
The picture in America regarding gambling is changing quickly, with Michigan the latest state to give the green light to online betting following the Supreme Court’s ruling in 2018.
Joe Biden’s arrival as the new president, with his call for unity, is also expected to be good news for the online gambling industry in the country.
Biden previously indicated his support for opening up the online gambling industry in America, with a lot of companies jostling in position to take advantage of the upcoming changes.
With many states yet to approve sports betting – some in the South are believed to be extremely reluctant to do so – it is no surprise that black market gambling is common in some areas.
But legalizing online betting can be good business. Sports gambling has made over $1 billion in Colorado, with other states taking note of the revenues they could receive from the sector.
Tackling black market gambling may therefore be a smart move financially in the future.