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Gambling Commission refrains from estimating size of black market

The regulator has released the final of its four-part series on illegal online gambling.

· 4 min read
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gc report on black market doesn't estimate size
Key Points
Gambling Commission releases the final part of its illegal online gambling report
Part four is called "Estimating the size of the illegal online gambling market"
No estimate is given for the size, though the conclusion commits to further research in this area

In the report entitled: "Estimating the size of the illegal online gambling market," the Gambling Commission (GC) has resisted the temptation of doing so, deeming all currently available methods of estimating the size of the UK's illegal online gambling market to be too unreliable.

While the GC recognises that alighting upon an agreed figure and methodology would allow it to review its enforcement efforts with more accountability, the margins for error are thought to be too wide to be useful.

The final release of a four-part report into the illegal online gambling market instead includes a breakdown of three research methods, exploring the strengths and weaknesses of each.

A 'dwell-time method' would estimate a value of expenditure based on data showing how long individuals have spent and do spend on illegal gambling sites. Presently, the GC says it doesn't have enough data to refine this approach.

A 'channelisation method' is used in Sweden, where gross gambling yield (GGY) of the legal market is combined with engagement data - using this as a benchmark, engagement data from illegal websites can be used to estimate black market expenditure.

The GC suggests that this method overlooks the disparity in behaviour between users of illegal and legal platforms.

Finally, the cost-effective, old-fashioned survey method is posited and quickly rebuffed for being too reliant on users remembering the amount of money they gambled on illegal sites - this is a particularly murky source of evidence considering that many report not being able to tell the difference between licensed and unlicensed operators.

It is a bold time for the Gambling Commission to release a report that eventually eschews the opportunity to build a clear narrative.

The Betting and Gaming Council (BGC) did not fail to put a number to the black market when releasing its own report earlier this year.

Though that figure, £2.7bn ($3.55bn), is just an estimate, having it there helps the organisation build the story it wants to tell around it - having a settled metric also allows for comparisons later down the line and means the BGC can hold the GC's feet to the fire if the number moves in the wrong direction.

Ben Hader, Director of Research and Statistics at the GC, has justified the regulator's decision, suggesting: "As a public body, with a responsibility for generating reliable and credible statistics, it is vital that we communicate uncertainty associated with our research and issue health warnings where necessary."

While neglecting to offer an estimate may hold the GC back in some ways, the in-depth explanation of each methodology's weakness is in and of itself a rebuke of other independent organisations that have done so.

Hader and the GC report both emphasise that further time and resources will be put into research and data-gathering in the hopes of issuing a more definitive report later down the line.

Good to know

The Gambling Commission issued one of its largest fines of recent years in October with the £10m fine for Unibet operator Platinum Gaming Limited

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