Recent data indicates that the UK government’s gambling reforms may be underperforming in some areas, particularly in the fight against black market operators.
Black Market Horse Race Betting Soars
The UK black market for gambling has experienced a staggering 522% increase in unique visits to unlicensed horse racing betting websites, raising concerns over regulatory policies potentially pushing users away from legal platforms. A report by the International Federation of Horseracing Authorities (IFHA) highlighted this spike in exposure to unregulated sites, prompting calls for regulatory action.
Legal Platforms Lag Behind
According to the IFHA’s latest study, 22 unlicensed platforms targeting UK consumers saw a 522% increase in unique visitors, while total traffic to these illegal websites rose by 131%. In contrast, legal horse racing wagering providers saw only a 49% increase in unique visitors and a 25% rise in overall traffic, underscoring the growing dominance of unregulated platforms.
The study suggests that the UK’s recent gambling regulations, such as the affordability checks introduced in the 2023 Gambling Act review, may partly explain these troubling results. Brant Dunshea, the acting CEO of the British Horseracing Authority (BHA), expressed concerns about the government’s regulatory policies, noting the unintended consequences on British racing.
“From the outset of the Gambling Act review, British racing has repeatedly warned of the unintended consequences of well-meaning policy decisions on our sport, including the threat of inadvertently growing unlicensed market activity.” – Brant Dunshea, BHA Acting Chief Executive
While the IFHA acknowledged that regulatory changes might not be the sole cause of this alarming trend, it emphasized the impact of black market operators on vulnerable individuals. Notably, these illegal entities allow users to bypass self-exclusion schemes like Gamstop, leading to problem gambling relapses.
Calls for Regulatory Changes
The proliferation of black market entities carries significant financial implications. The BHA’s October 2023 Right to Bet survey, which included over 14,000 racing bettors, revealed that 10% were engaging with illegal operators. Meanwhile, UK Gambling Commission (UKGC) data shows a £1.6 billion ($2 billion) decline in online bets on British racing over the past two years.
The Betting and Gaming Council (BGC) also voiced concerns about these findings. Surveys indicated that 1.5 million Brits now spend up to £4.3 billion ($5.37 billion) annually on black-market gambling, highlighting the need for regulatory balance. BGC CEO Grainne Hurst warned of the consequences if the government does not act swiftly.
“We have been clear: balanced regulations and a stable tax regime are the best defense against the black market. If that doesn’t happen, these statistics will only go one way.” – Grainne Hurst, BGC CEO
Both the BHA and BGC have urged the UK government to reconsider its gambling reform policies, ease some regulatory restrictions, and enable the regulated sector to compete more effectively with unlicensed entities. Intensified crackdowns on illegal operators could also help protect consumers as policymakers strive to balance regulation and market sustainability.
