International edition
March 07, 2021

In a report written by consultancy PwC

UKGC criticizes major betting firms for exaggerating black-market scale

UKGC criticizes major betting firms for exaggerating black-market scale
"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," the UKGC chief executive said.
United Kingdom | 01/18/2021

The regulator has said a report commissioned by the Betting and Gaming Council and several of the UK’s major gambling companies is "not consistent with the intelligence picture" and should be treated cautiously, adding that it lacked any evidence to show an increase in illicit betting. The BGC has repeatedly referred to the report to back its arguments against stricter regulations.

U

K gambling companies have recently been accused by the UK Gambling Commission of exaggerating the scale of illicit betting in a report written by consultancy PwC to avoid the enactment of tougher regulations that may arise from an upcoming government review.

In a letter to a cross-party group of MPs examining gambling-related harm, UKGC chief executive Neil McArthur said the report was "not consistent with the intelligence picture" and did not distinguish between real consumers using black market sites and bots or other automated systems. He said the report should be treated cautiously, adding that it lacked any evidence to show an increase in illicit betting. 

The report claims that 200,000 people in the UK spend £1.4bn (USD 1.9 B) on black market sites every year, warning that tougher regulation could drive more people into the arms of “unscrupulous” operators, the Guardian reports.

"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," he said.

McArthur said black market concerns should be kept in proportion “despite … reports from consultants paid for by the industry, and should not distract from the need to continue to drive up standards and make gambling safer in the regulated market”.

Such direct criticism from the regulator will be a blow for the Betting and Gaming Council (BGC), which has repeatedly referred to the report to back its arguments against stricter regulations.

The government is considering a range of measures that could involve limiting stakes on online virtual slot machines, or forcing web-based casinos to carry out thorough affordability checks if customers deposit a certain amount per month.

McArthur dismissed the BGC’s suggestion that such measures could fuel a surge in black market operations.

“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,” he said.

The Labour MP Carolyn Harris, who chairs the MPs’ group that receive the letter, said: “The online gambling industry talks up the threat of the black market in an attempt to resist regulation and protect its profits, but trying to hijack the debate by manufacturing dodgy dossiers of information to further their own ends is an incredibly transparent tactic and will not be any kind of excuse to hold down standards.”

Matt Zarb-Cousin, a former adviser to Jeremy Corbyn who runs the campaign group Clean Up Gambling, said: “The gambling industry has been quoting from this report as it attempts to drive a race to the bottom in regulation. Having finally seen the contents, it’s clear why it was reluctant to make this report available for public scrutiny.”

A BGC spokesperson said countries with tougher regulation than the UK had bigger black market problems.

“We have repeatedly called on the government to use the online harms bill to crack down on access to these sites, and we would support financial service providers being obliged to block black market transactions,” he said.

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