Entain calls for global crackdown on black market gaming operators

Governments worldwide must take decisive action to tackle the growing threat of black market gaming operators, according to a new report by consultancy Regulus Partners. The report, commissioned by FTSE 100 sports betting group Entain, outlines a series of policy measures aimed at curbing the activities of unlicensed operators and closing a substantial tax gap in the UK and other international markets.

The report estimates that black market gambling in the UK alone could contribute to a tax shortfall of up to £335 million ($448 million) over the next parliamentary term. Research by Frontier Economics has pegged the annual tax loss at £70 million ($93 million), a figure that could rise without intervention.

Countries such as France and Germany are also heavily affected by unlicensed gambling, with 45% and 60% of gambling revenue lost to black market operators, respectively. According to Regulus, restrictions on popular gambling products in these markets have pushed players towards illegal platforms.

To counter this growing issue, the report proposes five key measures: blocking payments to unlicensed operators, restricting their advertising, blocking their IP addresses, stepping up criminal enforcement, and educating consumers with a public blacklist.

Barry Gibson

"Taking on the black market operators should be a key priority for policymakers around the world," said Barry Gibson, chair of Entain, at the SBC Summit in Lisbon. "It will tackle crime and raise money which could be spent on critical areas such as healthcare, education, and infrastructure."

Gibson further warned that failing to address the black market could have dire consequences for regulated businesses and customer protections. "If we go down the route of further tax increases rather than tackling the black market, it will drive even more customers towards unscrupulous operators," he said.

Despite the UK’s well-balanced regulatory framework, black market participation is rising, particularly among younger players under the age of 35, who are twice as likely to use unlicensed platforms. This demographic accounts for two-thirds of the total black market gambling stakes.

The report follows previous warnings from the Betting and Gaming Council (BGC), which raised concerns about the surge in traffic to black market sites during major events, such as the 2022 World Cup. Research by Yield Sec found that visits to unregulated sites tripled during the tournament.

The Regulus report concludes that regulatory measures will only be effective if they are supported by attractive legal gambling options. "Legal and regulatory countermeasures can be highly effective as long as the domestically regulated product offer remains attractive," the report stated.