In 2020 in the UK, the total gross gambling yield stood at £14.1 billion and in a study commissioned in 2021, PwC identified that around 2.1% of all online betting of that same year was through illegal and unlicensed operators.
This is actually very low when you compare it to global levels. Yeo Teck Guan, Chief Business Technology Office of Singapore Pools Pte Ltd was speaking as part of a panel at ICE Vox and identified the level in Singapore at over 50%.
So why does the UK have a comparatively low level of illegal betting compared to other countries?
Ron Segev, Found Partner of Segev LLP identified one key area.
“Business conditions are absolutely key when fostering an illegal market. If you can’t get access to conventional banking or debt and equity financing then this will lead to companies working in the shadows. Sophisticated banking requires the company to work legally. Unsophisticated banking doesn’t care. In Ontario, we have 5 chartered banks and initially not one of them was willing to process payments for operators. All this does is drive people to the illegal market.”
The relationship between operators and both financing and government entities is absolutely key across all markets. Juan Franco, Chairman and Board Member of Apostar and Super Astro discussed this in relation to product and enforcement.
“We need to work closely with government entities and help them understand how important enforcement is. Laws are important but they need to be enforced. At the same time, taxes on legal operations need to be supportive of both the player and the operator.”
Away from legislation, Segev also raised the point that legal operators need to give the customer what they want.
“As a legal operator or regulator, if you don’t give the people what they want then they are going to find it somewhere else. Are you offering the types of games or stakes that people want? Are your games too restrictive? If a player is getting a better price somewhere else then they will go there, legally or otherwise.”
The benefits to all parties in stamping out illegal gambling are clear. Greater revenue for governments is obvious but there is also much greater protection for the players. Illegal operators don’t pay tax and they don’t have rigorous verification for users leading to more fraud and toxic gambling. Similarly, there is no guarantee that if you bet through an illegal operator that you’ll get your money back even if you do win.
The difficulty globally is that all governments and regulators work to different standards and are established within differing cultures. There is no one size fits all method to clamp down on illegal markets.
This panel at ICE Vox had a clear sense that sharing best practice amongst a global audience is an important step to creating a safer, more responsible and more enjoyable global gambling community where legal operating is both championed and celebrated.