Gambling Commission study links illegal gambling sites to far higher rates of problem gambling in Britain

A Gambling Commission study of online illegal gambling has found a strong association between using unlicensed sites and gambling-related harm. The industry has welcomed the findings, which also raise questions about the regulated sector's own responsibilities.

The regulator examined customer transactions with both legal and known illegal sites. It found that 45% of people who transacted with illegal operators had a Problem Gambling Severity Index score of eight or more, compared with 6% of those who transacted with licensed companies. A further 16% of illegal-site users scored between three and seven, against 8% for legal-site users. The report suggests the higher figures could partly reflect self-excluded customers turning to non-Gamstop sites to bypass their exclusion from the regulated market.

The sample was small. It covered the transactions of 179 individuals, with PGSI scores available for 146. Most were male, with an average age of 44, so the results cannot be applied directly to the whole UK adult gambling population. Dan Waugh, partner at advisory firm Regulus Partners, called it a small-scale survey but said the findings match wider research and reinforce concerns about growth in unlicensed gambling. A Flutter UKI spokesperson said the figures show why tackling the illegal market is important for government and regulator.

The study also looked at how long customers stay with unlicensed operators. Those who used such sites made an average of 4.9 transactions to them in the first month, falling to 1.8 in the second month and 1.4 in the third. The figure rose to 1.9 in the fourth month, then dropped to 1.2 and 1.5 in the fifth and sixth months.

The findings arrive in the same week as a budget raising Machine Games Duty to 25%, on top of an earlier increase in online gaming tax. Operators are also facing tighter requirements such as financial vulnerability checks and financial risk assessments. Industry lobbying has long leaned on the black market argument, though recent campaigning against the Machine Games Duty rise has focused more on jobs.

The study includes some points that may frustrate operators. The 6% figure for licensed gambling excludes lotteries, which some bookmakers and casinos want held to the same standard. More significantly, 91% of people who used illegal firms also gambled with the legal sector at the same time, and the Commission described the overlap as substantial. That implies some people with problem gambling behaviour continue to gamble with licensed operators, an area the regulated industry will need to address.