Neil McArthur: UKGC research suggests black-market concerns are exaggerated

UK Gambling Commission (UKGC) CEO Neil McArthur is “not convinced” that further regulation of the licensed market could send consumers offshore to the unregulated realm. In a letter responding to the Gambling Related Harm All Party Parliamentary Group (APPG), the UKGC chief claimed a report authored by accountancy giant PwC was “not consistent with the intelligence picture” gathered by the UK regulator in its own research. According to UKGC data, it received 26,212 queries to its contact centre in 2020, with just 182 of those concerning illegal online gambling.

These figures are in stark contrast to a PwC report, first released in December, which claimed the UK’s unlicensed gambling market could be worth as much as £1.4bn, attracting 200,000 punters annually. The PwC copy provided evidence that unlicensed operators accounted for 2.5% of all visits to betting websites, amounting to more than 27 million visits in total. Furthermore, the report suggested one in 10 of all gambling search results were for black-market sites. Responding directly to the report, the UKGC said it welcomed the independent research, but added it should be “treated cautiously”, claiming any evidence of an increasing online illegal gambling presence in the UK was being overstated. “Their methodology makes clear they had to use data from August 2018, which indicates traffic to websites but does not differentiate whether that was by consumers or reflective of the vast amount of automated transactions that bots and other system tools conduct,” McArthur wrote. “While we are concerned about the issues described above and take action to protect consumers, we need to point out that our data indicates that scale of illegal market is stable. “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. “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 UKGC CEO added. The report was highlighted by industry trade body the Betting and Gaming Council (BGC), which has called for greater action by the UK government against black-market firms as part of the review of the 2005 Gambling Act. BGC CEO Michael Dugher suggested any adverse action taken against regulated operators would have the unintended consequence of enabling the unlicensed market. “While this data shows that there are threats from illegal gambling for GB consumers, the scale of the threat needs to be kept in proportion, despite recent media reports and 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,” McArthur explained. The UKGC chief’s letter to MPs was published a week after campaign group Gambling With Lives suggested the industry was engaging in “scaremongering” in regards to the threat of the black market.