Gambling Commission Cannot Determine Size of Britain’s Illegal Market

The Gambling Commission has been unable to determine the size of the black market in Great Britain, after concluding its four-part series researching illegal online gambling.

The series, which the British regulator launched earlier this year, has aimed to improve understanding of consumer engagement with illegal online gambling. Previous reports looked into consumer awareness, consumer engagement, and the disruption of illegal online gambling. The final report aimed to estimate the size of the illegal online gambling market.

While the Commission used different methodologies to try and estimate the size of the black market, it said it has been unable to do so, due to concern regarding the reliability of estimates based on surveys which require consumers to recall previous illegal gambling expenditure, as this could be inaccurate.

Dwell time approach

The report was put together with the use of three different methodologies. The first was the dwell time approach, which converts time spent on websites into expenditure estimates. This was carried out on the assumption that more time spent on illegal websites would be associated with higher levels of spend. However, the Commission said it appears likely that spending behaviour will differ based on motivations for accessing the illegal market.

The data was based on 117 participants who said they had gambled on illegal websites in the past four weeks. A 34% majority bet on sports, and the vertical with the highest gross gaming yield spend per minute was casino betting at £1.12 per minute. The Commission said the sample size was too small to draw reliable conclusions though.

Channelisation rate

The second methodology was to look into the channelisation rate, referring to the amount of gambling activity which takes place through legal channels compared to illegal ones. The Commission used digital data company Similarweb to estimate the number of visits and durations at all websites licensed by the Commission, but said margins for error increase when a comparison with illegal websites is made.

So what do they know?

The third methodology was to collect survey data, but this was not published. While the final report in its series appears to have produced very little of value, the Commission said it has found not all activity in the illegal market represents a direct loss to the regulated sector, as some consumers are self-excluded or otherwise unable to gamble legally. The series also found some consumers are unaware they are gambling illegally, showing a need for greater public awareness.

Criminal cases vastly increasing

Despite its inability to gauge the size of the illegal market, the Commission’s CEO Andrew Rhodes recently spoke about how the regulator has seen a 300% year-on-year increase in criminal cases which it has been presented with. Rhodes also said the Commission is approaching 200,000 URLs it has reported to search engines, which has led to close to 100,000 being removed.

Speaking at the International Association of Gaming Regulators conference last month, Rhodes commented:

“In the last two years between our annual reports, one of the things that's really, really stood out to me is year-on-year we saw a 300% increase in the number of criminal cases we were taking as a regulator. I'd be surprised if that's not a pattern that is starting to emerge around the world.”

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