The number of British consumers gambling on unlicensed websites has doubled in the last three years, according to a new study by PwC.
The report found a steep rise in customers using offshore websites, despite these platforms being less visible on Google and with little evidence of growing public awareness of black market brands.
PwC said this is a “meaningful issue” for the industry, as unregulated websites threaten player protection, tax collection, and the fight against money laundering and match fixing.
It also said the sites may not treat players fairly or have responsible gambling safeguards.
Betting and Gaming Council
The PwC review of unlicensed online gambling in the UK was commissioned by the Betting and Gaming Council (BGC), a cross sector trade body.
The BGC urged the British government yesterday to take the report into account as part of its Gambling Act Review, warning of the “dangers of complacency”.
“This new report by PwC is an impressive and comprehensive piece of work which demonstrates how the unsafe, unregulated black market is a growing threat to British punters,” BGC chief executive Michael Dugher said.
“These illicit sites have none of the regulated sector’s consumer protections in place, such as strict ID and age verification checks, safer gambling messages and the ability to set deposit limits,” he added.
“The UK risks sleepwalking into changes where the main beneficiary is the unlicensed black market. We all have an interest in getting future changes right, so must take heed of this latest evidence and look at what is happening elsewhere around the world.”
Ian Proctor, chairman of the global sports betting, gaming and entertainment provider Flutter Entertainment in the UK, acknowledged the industry had to improve consumer protection standards.
He did warn, however, that enhanced safeguards must not lead to restrictive regulation which would make the legal gambling market less attractive to consumers.
The study used four metrics to determine the spread of unlicensed online gambling: public awareness of unlicensed operators, public usage of unlicensed operators, spend at these operators, and the proportion of unlicensed operators in Google search results.
The number of individuals using unlicensed sites more than doubled from 2.2 per cent to 4.5 per cent, around 460,000 people if reflected on the general population.
Web traffic data showed an 85 per cent increase in traffic at 11 unlisted sites from October 2018 to November 2020.
Unlicensed usage increased across every gambling platform. Bingo had the highest growth in usage, from 0.7 per cent to 2.8 per cent, and poker the second highest.
Consumer spending on offshore gambling sites almost doubled, from 1.2 per cent to 2.3 per cent, representing a total spend of £2.8bn for the whole UK population.
The study also found that players who had lived abroad were not more aware of unlicensed sites, suggesting awareness was not driven by players who had lived in countries where these sites may have been legal.
Additionally, PwC compared British figures to other European countries, suggesting unlicensed online gambling in Britain is much lower than in most countries, but that this is mostly due to lower tax rates and fewer “administrative burdens” or product restrictions.
Countries with higher levels of tax like France, or with difficult administrative obligations like Spain tend to see more offshore spend than the UK.