UKGC Begins Groundbreaking Study of Illegal Gambling Market

The UK Gambling Commission (UKGC) has launched its first comprehensive study of the UK’s black market for gambling, set to be released in spring 2025. This initiative is designed to enhance the regulator’s ability to detect and address illegal online gambling, with the goal of understanding how consumers access unlicensed websites and the scale of such activities. The findings from this study will allow the UKGC to improve its monitoring and enforcement capabilities.

The Commission’s study methodology combines web traffic analysis with gambling behavior data to estimate the Gross Gambling Yield (GGY) of the unlicensed market. By tracking search terms and web traffic to illegal sites, the UKGC aims to identify the most popular sites used by UK players. The study also relies on average player spending data collected from licensed operators, enabling the regulator to estimate the financial scale of the black market.

Estimating the Scale of the Black Market

To calculate the GGY of unlicensed sites, the UKGC is using player spending data from over 139,000 online accounts. The data, collected between July 2018 and June 2019, provides a benchmark for estimating the average GGY per minute for online slots, calculated at £0.32. However, the study does not yet account for high spenders in other areas such as sports betting.

In addition to web traffic data, the UKGC is closely examining consumer motivations for engaging with unlicensed operators. Common reasons include avoiding identity verification checks, seeking better odds, or using VPNs to bypass restrictions. These insights will help the regulator fine-tune its strategy for targeting illegal gambling operations.

Future Considerations and Broader Collaboration

The UKGC plans to build upon the initial findings by incorporating more data sources in future versions of the study. This includes looking at how social media platforms, streaming services like Twitch, and encrypted messaging apps like Telegram and WhatsApp drive traffic to illegal gambling sites.

The regulator is actively seeking collaboration from licensed operators and other stakeholders to provide data that can improve the accuracy of its findings. “Tackling the unlicensed market is a shared goal, and we encourage operators to contribute any relevant data,” said the UKGC.

With the first iteration of the study due in 2025, the UKGC hopes to gain a clearer understanding of the black market’s dynamics and take stronger action against illegal gambling activities in the UK.

Source:

Unlicensed Gambling: Using Data to Identify Unlicensed Operators and Estimate Usage, gamblingcommission.gov.uk, October 2024.