The research revealed a rise in players who had self-excluded on GAMSTOP being targeted by the black market. The number of illegal operators was also found to have increased “fourfold” between 2021 and 2022. That number doubled again to 231 during 2023. In total, more than 1,000 affiliates helped to publicise illegal operators.
According to Yield Sec, this means that illegal gambling now makes up 4% of the UK’s online gambling market share and gross gaming revenue (GGR). This results in a significant drop in tax revenue, as well as funding for responsible gambling initiatives such as GAMSTOP.
The data showed illegal operators were disregarding “mainstream customers”. Yield Sec instead stated they were targeting vulnerable demographics, such as self-excluded players and children.
Yield Sec also found thousands of Google searches bidding to aid the avoidance of self-exclusion. By January 2024, Yield Sec detected millions of “not on GAMSTOP” and other similar Google search results. This allows vulnerable gamblers to bypass self-exclusion strategies with legal operators.
As a result, at-risk players are falling through the “trap door” of looking to bet with illegal and potentially dangerous operators, who are not monitored by tools such as Yield Sec and GAMSTOP.
Commenting, Ismail Vali, founder and chief executive of Yield Sec, stated: “Our surveillance highlights the disturbing and cynical growth of a certain type of illegal operator present in the UK over the past three years.
“The evidence of illicit gambling options that seek to cynically work around and enable vulnerable problem gamblers to avoid GAMSTOP self-exclusion is distressing and demands immediate and meaningful intervention.”
UK White Paper’s illegal market measures
As per Yield Sec’s findings, Vali has announced that he wants to see more resources dedicated towards the prevention of illegal gambling. This includes greater collaboration between regulators, legal operators and law enforcement – in order to clamp down on illegal operators and protect vulnerable players.
Yield Sec’s “stark warning” comes after the UK’s White Paper was released in April 2023. The White Paper committed to increase regulatory powers to combat illegal gambling.
However, David Brown, a UK industry veteran since 1976 and former executive trading director for William Hill, Coral and LadbrokesCoral, believes the affordability checks called for in the white paper are instead driving vulnerable players to the black market.
“This present scenario of potentially highly intrusive affordability checks is likely to encourage illegal operators within Britain,” Brown told iGB in a recent interview. “There is no room for complacency here.
“A wise position would be to be alive to the threat of illegal activity and work collaboratively as an industry to identify it and prosecute under the law.
“Stopping illegal traffic through geo-blocking and advertising into the country is a good place to start.
“However, that will not halt British bettors engaging with betting operators outside the GC’s jurisdiction. This also does nothing to identify any black market non-digital betting within Britain.”
Germany and France also struggling with black market issues
The United Kingdom is not the only nation struggling with illegal gambling. Both Germany and France have revealed the prevalence of the black market in their respective countries.
A recent study found nearly half of all online gambling in Germany occurs with unlicensed operators. This has put the German gambling regulator (GGL) under increasing pressure to combat the issue.
The study identified the black market to be generating three-quarters of revenue. At a conference in October 2023, it was said that Germany’s licensed gambling operators are under more pressure from black market competition than ever before.
In France, meanwhile, the regulator l’Autorité Nationale des Jeux (ANJ) estimated France’s black market to be worth up to €1.5bn. This accounts for over 10% of the total bets wagered in France each year.
The ANJ has since revealed an action plan to tackle illegal gambling. Measures included increasing collaboration with European regulators, as well as looking to boost public awareness over the potential dangers of illegal gambling.
Original article: https://igamingbusiness.com/legal-compliance/regulation/yield-sec-data-shows-rise-in-illegal-market-targeting-at-risk-players/
