UK LEGAL
using black market sites will be crucial to disruption efforts, as well as understanding which new regulatory measures may have contributed to any increase in the use of unlicensed operators. This forms part of the Commission’s research and hopefully data on this will be published next year, although initially it will be focussing only on the motivations of those who have experienced gambling harms, especially those who have self-excluded.
Reasons for using unlicensed operators was a key part of the research commissioned by the BGC. This found the most common reason for use of unlicensed operators to be ‘better bonuses / free bets’, cited by over a third of respondents. The gap between bonuses able to be offered by licensed and unlicensed offers is set to widen, following the completion of the Gambling Commission’s Autumn 2023 consultation exercise which proposes limiting bonus wagering requirements with either a complete ban, or a 1 time, 5 times or 10 times limit. Other reasons highlighted by the BGC report also raise concerns about the impact of proposed measures arising from the previous Government’s White Paper, including customers wishing to avoid deposit or bet limits, or wishing to avoid providing documentation. New online slot stake limits, if implemented as proposed by the previous Government, could well lead to an increase in customers seeking out unlicensed operators in order to place higher stakes.
Another factor with significant potential to increase the use of black-market operators is taxation. The higher the tax burden on licensed operators, the greater the disparity will be between them and unlicensed operators when it comes to the bonuses, incentives and odds that can be offered whilst retaining a profit margin. By the time you are reading this article the government’s budget should have provided clarity on any proposed increases in gambling duties. What is already clear is that a doubling of the rate of remote gaming duty, foreshadowed by an article in the Guardian newspaper, is very unlikely to happen. Any tax rises that are announced are likely to have around a one year lead time, to enable operators to prepare for the increase.
It could be argued that the Gambling Commission’s efforts to measure the black market, with the first wave of data to be published in 2025, are ‘too little, too late’. However, data being captured during 2024 will at least pre-date measures like limits on online slots stakes and bonus wagering requirements, hopefully facilitating some understanding of those measures when it comes to consumer choices of where to gamble.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.
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