Betting and Gaming Council Report Shows European Black Market Gaming on the Rise

Posted on: February 21, 2022, 07:18h. 

Last updated on: March 31, 2022, 01:46h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

The Betting and Gaming Council (BGC) has produced the results of a study that shows an unsettling trend. Restrictive betting markets in Europe are witnessing a rise in offshore gambling instead of an improvement.

Michael Dugher
Michael Dugher, the head of the UK-based Betting and Gaming Council, speaking with reporters. The Council’s new report on European iGaming paints a grim picture of what happens when countries over-regulate their gaming markets. (Image: SBC News)

There are plenty of reasons why introducing regulations to the gaming industry is a good idea. They can protect both operators and end-users and increase transparency and fairness.

Regulations also make sure governments get their piece of the action. However, too much regulation can have the opposite effect. A new report produced by the UK’s Betting and Gaming Council (BGC) supports this, and warns that the UK is on a path of self-destruction if it tries to over-regulate its gaming market.

Offshore Gaming a Standard Feature in Europe

The BGC commissioned PWC to investigate the state of black-market gambling in Europe ahead of the UK’s upcoming regulatory reform. It won’t come as a surprise to most that many countries where gambling oppression is on the rise are seeing an increase in offshore activity.

In a press release, the BGC highlighted several European countries and the issues they face with the use of illegal gambling sites. For example, Norway, one of the most restrictive and monopolistic markets, sees about 66% of its online money staked head offshore.

France isn’t too far behind. It loses around 57% of all money staked to illegal operators. France has a legal iGaming market, thanks to a 2009 law change. However, it doesn’t have any iGaming operators with a license in the country.

As the growth of these sites has rocketed, black market sites’ revenues in Norway have more than tripled since 2010 and French black market revenues have almost doubled since 2015,” said a new BGC report on black-market gambling in Europe.

While self-exclusion is a great idea on paper, it doesn’t always work in the real world. Sweden, like many countries, offers self-exclusion. But this hasn’t stopped 38% of consumers from simply switching to offshore options.

Italy and Spain haven’t escaped offshore betting’s reach, either. As they have continued to introduce new controls and restrictions, black-market gambling has increased 23% and 20%, respectively.

UK Gaming On a Collision Course with the Black Market

If the UK isn’t careful, it’s going to end up where these other countries have. The PWC report indicates that the number of British gamblers heading to offshore sites has gone from 220,000 two years ago to 460,000 now. The amount of money they stake in offshore sites is “in the billions of pounds.”

Even the UK Gambling Commission’s (UKGC) own research shows that the current level of regulation is doing its job. It released a report recently that showed the “problem gambling” rate in the country has dropped from 0.6% to 0.3% over the past couple of years. This also reflects other studies.

Should the UKGC, as well as UK lawmakers, continue to clamp down on the gambling industry, it could do more harm than good. The BGC points out that as many as 120,000 jobs are at stake. In addition, the government could lose the ￡4.5 billion (US$6.12 billion) it earns through tax revenue each year.

The BGC, which represents a number of gaming operators, isn’t calling for a ban on the creation of regulations. Instead, it’s calling for a commonsense approach to how they’re created. The Council hopes the powers-that-be can find the necessary balance that provides the necessary oversight, while still giving consumers the ability to rightfully choose how and when they seek out their preferred form of entertainment.