Alarming data revealing the scale and impact of the black market continues to emerge across all continents. According to a report by H2 Gambling Capital for Responsible Wagering Australia (RWA), the Australian gambling market loses 3.9 billion Australian dollars (£1.9 billion) annually to illegal sites. This figure is expected to rise to 5 billion Australian dollars (£2.5 billion) by 2029.

In a Yield Sec report commissioned by the European Casino Association (ECA), the EU’s black market is estimated at €80.6 million in gross gaming revenue – more than double the legal market’s €33.6 billion. The ECA highlights the “systematic theft of revenue and violation of regulatory and consumer protection standards” by illegal operators across the EU.

The outflow of funds from the regulated sector is costly both for operators and for the economies in which they operate. Using a unified tax rate of 25%, Yield Sec calculated that the 27 EU member states lose more than €20 billion in tax revenue each year. This figure is seen as a tipping point in taxation, at which players begin to favour the black market.

In Australia, the black market is forecast to cost the government nearly $2 billion in lost revenue over five years, as well as almost $800 million in lost fees earmarked for sports and racing organisations.

“Illegal online gambling is not a marginal issue; it is an economic and societal threat. Every euro lost to criminal operators is a euro stolen from European citizens, from legitimate and licensed businesses, and from our communities,” said Erwin van Lambaart, Chair of the ECA.

More concerning for bodies such as the ECA and RWA is the impact of the black market on consumers, given that such operations do not have to adhere to the same regulatory standards as licensed operators.

“Unlike licensed operators, who use data to identify and support at-risk customers, illegal sites use it to target vulnerable Australians and minors with high-risk offers and exaggerated bonuses,” explained RWA’s CEO, Kai Cantwell.

“Australia’s world-leading consumer protections are only effective if people stay within the system, and right now, it’s too easy to bypass them offshore with a few clicks.”

The report from Australia notes that 50% of Australians who gambled offshore have done so after registering with the country’s self-exclusion register, BetStop. These figures align with figures from the UK, where Gamstop found that 8% of its users have bet with unlicensed operators, and many websites target users by marketing themselves as ‘non-Gamstop casinos’.

According to the ECA’s report, unlicensed operators “exploit” online advertising channels to reach vulnerable customers and impersonate licensed casinos using their logos and imagery.

In Australia, better odds (48%) and bonuses (44%) were the most commonly cited reasons for players to stray to the offshore market. However, the survey also noted that live in-play betting, an offering prohibited by Australia’s gaming rules, was an influential factor.

According to Cantwell, this highlights that it is “essential” that Australia’s regulated market remains competitive.

“If people can’t find the products or prices they want here, they don’t stop gambling, they just go offshore,” he added.

H2 Capital’s report calls for stronger enforcement backed by “sensible onshore regulation and cooperation from industry, banks, tech platforms and sport” to “cut off the lifelines that keep illegal operators in business”.

It also recommends the formation of a National Illegal Gambling Blacklist Platform (NIGBP) and the integration of the National Self-Exclusion Register with payment monitoring systems to block transactions for BetStop-registered individuals to operators listed on the NIGBP.

“A strong, consistent national framework will protect Australians, preserve funding for sport and racing, and ensure initiatives like BetStop aren’t undermined by unregulated offshore sites,” concluded Cantwell.

Source

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