The black market is the gambling threat Westminster can't ignore
The growing gambling black market is a threat policymakers can't afford to ignore, writes Gareth Snell, Labour and Co-operative MP for Stoke-on-Trent Central
In politics, there is often an assumption that if we see a problem, more regulation is the answer. Sometimes it is.
But good policymaking is not just about intentions. It is about consequences.
As Parliament continues to debate gambling reform, we should ask a simple question: are we making consumers safer, or are we creating conditions that make it easier for illegal operators to thrive?
That question matters even more during a major sporting event like the World Cup.
Millions of people are following the tournament and many will place a bet as part of enjoying the football. The overwhelming majority will do so safely and responsibly. The challenge for policymakers is ensuring they do so in a regulated market, with protections and safeguards in place, rather than drifting towards illegal operators who offer none.
As the MP for Stoke-on-Trent Central, I have spent more time than most thinking about these issues. The largest private employer in my constituency is bet365, which supports around 5,500 jobs. But I am not writing this to plead the industry's case.
As it happens, I do not gamble much myself, other than perhaps a flutter on the Grand National because it is something I used to do with my grandad and remains a fond memory.
What concerns me is whether we are paying enough attention to the unintended consequences of regulation and taxation, particularly when it comes to the growing black market.
The regulated betting sector in Britain operates under some of the strictest standards in the world. Licensed operators are required to carry out age verification checks, anti-money laundering controls and safer gambling interventions. They contribute to the economy, support jobs and sport, and fund the new industry statutory levy, which is delivering over £100 million each year for research, prevention and treatment services.
Illegal operators do none of those things.
They do not carry out meaningful checks. They do not contribute to sport. They do not pay tax in Britain. Most importantly, they do not care whether a customer is vulnerable, underage or experiencing gambling harm.
Yet many consumers simply do not know the difference.
We all carry smartphones in our pockets. Within a few clicks, anyone can find themselves on an offshore gambling site. It may look legitimate. The odds may look attractive. But the protections that exist in the regulated market often disappear entirely.
That should concern all of us.
And the evidence suggests this is not a marginal problem. Independent analysis by global market intelligence firm WARC found unregulated operators now account for almost half of all gambling advertising spend in Britain. Separate forecasts from H2 Gambling Capital estimate that the amount staked with illegal operators could rise from £17 billion this year to more than £33 billion by 2028.
The direction of travel should worry policymakers. A growing black market means more consumers exposed to unregulated operators, less money flowing into British sport and public services, and fewer opportunities to intervene when people need support.
The challenge for policymakers is not whether gambling should be regulated. It absolutely should.
The real question is whether we are regulating in a way that keeps consumers in the safer, regulated market, or whether we are unintentionally pushing some towards the black market.
That is not a theoretical concern. The Office for Budget Responsibility has already warned about the potential for movement towards unregulated operators. We have seen similar challenges emerge overseas, including in the Netherlands. We should learn from those lessons rather than repeat them.
This is not just a challenge for DCMS. It should be a priority for the Treasury too.
Every pound staked with an illegal operator is a pound beyond UK consumer protections. It is a pound that contributes nothing to British sport and nothing to the public finances.
At a time when Ministers are rightly focused on economic growth, consumer protection and supporting public services, that should matter. The World Cup is a reminder of what is at stake.
The challenge for Government is not simply to regulate more. It is to regulate better.
That means continuing to improve protections, while ensuring consumers remain in the regulated market rather than being pushed towards illegal operators who operate beyond the reach of British law.
If well-intentioned policies end up driving more consumers towards the black market, everybody loses.
Consumers lose. Sport loses. The Treasury loses.
And the criminal operators win.
Gareth Snell is the Labour and Co-operative MP for Stoke-on-Trent Central.
