The survey was carried out with the aim to better understand how UK gamblers are accessing the illegal gambling market, marking the first major study on the black market since the release of the previous government’s white paper in May 2023.

Of those surveyed, 5.4% said they used both regulated and illegal operators in the UK, while 0.8% bet exclusively on illegal gambling sites. It pooled data from over 6,000 gamblers that play casino, bingo and sports betting online.

Treasury facing £335m in online gambling tax losses

Of those that play on both legal and illegal gambling sites, it found around 12% of their wallet was spent with illegal operators, totalling £2bn a year. Those that exclusively used illegal sites spent £695m annually. This could amount to tax losses of up to £335m over the course of a five-year Parliament, the report warned.

Awareness of the black market is significant as the data suggests 15% of gamblers have heard of at least one illegal brand.

Social media was the most common channel for black market advertising, as 22% of respondents had seen ads across various social media apps. Sports sponsorships and other online adverts both had 13% of the vote, with streaming platforms and affiliates at 10% and 9% respectively.

Intelligence platform Yield Sec, which tracks black market gambling globally, found illegal gambling ads were prolific throughout illegal streams of the Olympic Games. Up to 46% of all illegal streams featured these ads.

Betting illegally in-person could add an additional £1.6bn in black market stakes, the report claims, as 4.4% of respondents admitted to gambling illegally in person. This would bring the total size of the illegal market to $4.7bn each year.

Better bonuses enticing players to illegal gambling

When asked what enticed them to use illegal sites, the majority of Frontier Economics’ sample highlighted bonuses and free bets (35%). This was closely followed by ‘ease of setting up an account at 32% and more flexible payment options and better odds, both with 30%.

By age, the younger demographics were more likely to be familiar with black market brands, as an overwhelming 38% of those that could name a brand were aged 18 to 24. The percentage drops as the age increases to 75+. Only 3.6% of this age group could name a brand.

A similar trend was shown for those that actually bet via illegal sites. The 18 to 24 year olds made up 16% and the percentage dropped for each subsequent age group.

Looking at the methodology, the data likely does not represent the true scale of the black market as it includes players that use “less visible and potentially unregulated channels” to bet, including an online VPN, which could be used for privacy rather than accessing illegal sites.

VPN use high among respondents

Breaking down how those surveyed gambled online author Frontier Economics found 5.8% said they used a VPN, while 2.9% only named black market operators in their answers and 2.9% said they only gambled via social media or messaging apps. With this information it is difficult to definitively determine whether a player is gambling via illegal channels.

However, Frontier Economics said they had scaled down their estimates as the survey over-sampled high staking players.

BGC CEO Grainne Hurst said the survey’s results were shocking and exposed “the unnerving true scale of the growing, unsafe, unregulated gambling black market”

Hurst called for tougher enforcement against the black market as the government and regulator “risked sleepwalking into the issue.”

“Simply giving the GC [UK Gambling Commission] more powers and more resources to tackle the black market won’t in itself, work. Enforcement is only part of the solution,” she said.

in 2019, the BGC commissioned PWC to carry out a similar study. It found British black market spend had doubled since 2018.