Measuring the illegal gambling market
Last week on 6 November the UK Gambling Commission's Director of Research and Statistics, Ben Haden, published a blog on the Commission's website about the size of the UK illegal gambling market.
Haden's article, Why is it so hard to measure the size of the illegal gambling market? asked and explored that very question.
Haden is right in saying:
'It will help us target resources and encourage a more informed debate about how we can best tackle this threat to consumers and legitimate businesses.'
Knowing what you're up against is a key part of any battle, conflict or challenge. But this challenge has been in place for quite some time.
Active black market
It almost seems as though the Commission has only just found out there's an active illegal market targeting UK players. However, it's not just active, it's thriving and was addressed thoroughly in a report commissioned by Deal Me Out several months ago. I think people are probably more interested in what the Commission is doing about illegal gambling, rather than what, as far as the public is largely concerned, is the behind-the-scenes number-crunching. I'm not saying the numbers aren't important, just that other elements of the whole problem are more important.
There's also a big public perception element at play here. Gambling is in the news at the moment – anticipated tax increases and the subsequent implications have been front page news – so it's a great opportunity to showcase the good work regulators and industry bodies are doing right now.
What is the Gambling Commission doing?
In the last 2 years the Commission has overseen a major increase in the execution of criminal cases – estimated at +300%. They're working with social media companies to disrupt traffic, have tracked around 1,000 unlicensed operators and shut down 100,000 illegal URLs. This is good stuff and it's important; it's what the public needs to know.
Why the emphasis on the size of the illegal market?
But does the public need to know how difficult it is to estimate?
Haden:
'By breaking down the challenge into its constituent parts, it is possible to see a pathway to making an estimate that is fit for purpose. Getting there will also need input from operators – data on the legal market will help us strengthen assumptions and update our evidence base. We are looking forward to further conversations to clarify what we need and how operators can help.
While the exercise of trying to understand the macro-metric of the size of the illegal market is important, the generation of trend data – and insight into specific websites to target disruption activity, is arguably even more vital. We are pleased we are now able to better understand these trends and supply key operational data to our Enforcement Team.'
A few considerations
- The Gambling Commission is tackling illegal gambling but at the rate the government or public expects?
- Telling the wider industry, the public and government that they're struggling to comprehend the size of the illegal market may not inspire confidence that the Commission is actually equipped to address it effectively.
- The Gambling Commission goes in very hard on operators who don't tow the line; fines for contravening Anti-Money Laundering regulations and other legislative failures are significant, often in the millions. This hard-line approach doesn't seem to be replicated when chasing down illegal casinos and slot sites.
- Many players aren't aware of the difference between an illegal and legal site so they might not be aware of the risks they are exposing themselves to. Additionally, millions are lost in tax revenues when there's an active and growing illegal market. And of course there's the overall reputational damage illegal gambling does to the legitimate industry.
Final words
I think it's fair to say that the Gambling Commission really needs to get stuck into tackling the illegal market with redoubled efforts as well as wondering how big it is.