UK GAMBLING BLACK MARKET DEBATE INTENSIFIES AS BGC RETURNS FIRE

The black market argument is intensifying in the UK, with the Betting and Gaming Council (BGC) returning fire in the form of a new information video. 

With the 2005 Gambling Act currently under review, the UK’s legal gambling industry has been accused of exaggerating the scale of the black market in an effort to counter calls for even tougher restrictions. 

A recent report by respected consultancy PwC, cited by the industry, estimates that 200,000 Brits spend £1.4B GBP each year at unlicensed black market online gambling sites, suggesting tougher restrictions on licensed operators would push even more people to use such sites – where they have absolutely no protection.

However, the UK Gambling Commission’s chief executive, Neil McArthur, dismissed the PwC report as “not consistent with the intelligence picture.” In a letter to MPs currently investigating gambling-related harm, McArthur accused the gambling industry of exaggerating the threat posed by the illegal, unlicensed market, adding:

“In any event, we are not convinced by the argument that suggests raising standards in the licensed market will prompt consumers to gamble with illegal operators.”

The campaign for tougher restrictions on the UK gambling industry is being fueled by special interest groups like Gambling with Lives – a problem gambling charity that has slammed current standards and accused licensed operators of offering “totally inadequate consumer protection.”

In response, the BGC has released a new animation to further explain its concerns about the black market, highlighting other issues too, such as the way unlicensed operators don’t contribute to tax revenues. 

AYO.NEWS says:

This is a seemingly intractable problem. On the one hand, the UK gambling industry as a whole did itself no favours for many years, and even now there are still actors who don’t take things seriously and are in it for short-term opportunism rather than long-term sustainability. 

On the other hand, many UK licensed operators have made significant progress in raising standards, are now world leaders in social responsibility, employ a lot of people and contribute plenty of tax. Many would argue that to further tighten restrictions would be like using a sledgehammer to crack a nut, and that the UKGC should actually concentrate on properly enforcing current standards.

When it comes to the scale of the threat from the black market, all sides seem to be missing two fairly obvious points. Firstly, the very nature of the black market means it’s unlikely anyone, either the UKGC and anti-gambling lobby, or the BGC and industry, will ever be able to get an accurate picture of its scale. 

Secondly, logic dictates that the scale of the threat is constantly variable. Even supposing the threat is relatively low right now, that could be because operators are able to offer competitive, attractive products under the current regulatory framework. However, as Swedish operators have found out over the past year, if regulations become overly restrictive, the relative appeal of black market operators could quickly increase. 

At the end of the day, we come down to the elephant in the room – that regulators and gambling pressure groups are evidently still determined to ignore. That is that it is patently ludicrous and unrealistic to think you can truly divide online markets into national jurisdictions. Of course, you can legislate, of course you can waste resources on a cat and mouse game of blocking and enforcement, but in today’s globalised, digital world, the simple fact is that people will compare their local offering to international offerings – licensed or unlicensed. And, that is what will shape consumer expectations. 

The entire situation reminds me of when, during the Cold War, it was prohibited to watch western television channels in parts of Eastern Europe. But, we know what happened when people simply turned their TV antennas around…

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