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UK Gambling Commission Prepares First Study to Combat Online Black Market

Gambling-Commission-embarks-on-black-market-study-to-improve-monitoringIn a bid to clamp down on illegal online gambling, the UK Gambling Commission (UKGC) is set to release its first comprehensive study of the UK’s black market. Scheduled for publication in spring 2025, the study aims to provide the UKGC with data-driven insights into the scale of unlicensed gambling and inform its strategies for disrupting illegal operations.

The research will investigate consumer motivations, focusing on why individuals access unlicensed gambling websites. By collecting and analyzing web traffic data and player behavior, the UKGC hopes to estimate the financial impact of the black market, particularly in terms of gross gambling yield (GGY). This data will enable the regulator to better monitor and combat illegal activities, ensuring that the licensed market is protected and consumers are safeguarded from harmful practices.

How the UKGC is Measuring the Impact of the Black Market

To estimate the size of the black market, the UKGC is employing a mix of web traffic analytics and player spending data.

The regulator has collected information from over 139,000 gambling accountsacross seven UK operators between 2018 and 2019, using this data to estimate that the GGY for online slot machines on unlicensed sites is approximately £0.32 per minute. However, this approach has its limitations, particularly when it comes to other forms of gambling like sports betting, which may involve higher spending but are not accounted for in the current model.

The UKGC is also monitoring specific search terms that are likely to be used by consumers seeking unlicensed gambling platforms. By tracking popular queries via Google Trends and Similarweb, the Commission identifies search results that lead to unlicensed sites. Web traffic from these sites is then analyzed, providing insights into the behavior of UK consumers on illegal platforms.

International Comparisons and Challenges

The UKGC’s efforts align with similar studies conducted by other European regulators, such as the Netherlands and Sweden, where data has shown that consumers often spend more on unlicensed platforms than on regulated sites. This insight is reflected in the UKGC’s methodology, which acknowledges that spending habits on unlicensed sites may differ from those on licensed ones.

In a note about the study, the UKGC said, “With a better understanding of why and how consumers access unlicensed gambling websites, we can identify ways in which we can use data to identify unlicensed websites and make estimates of their usage by GB consumers.” This approach will help the Commission create more effective strategies for monitoring and disrupting the black market.

CEO Andrew Rhodes emphasized the social and economic risks posed by the black market. “The illegal market is bad from a human point of view – as it poses a risk to consumers, especially the vulnerable. It is also unlikely to operate in a way that is fair or safe. It is also a concern from an economic point of view – as it pays no tax and undercuts legitimate business,” he stated. Rhodes further highlighted the role that data analytics will play in addressing these challenges.

Future Research: Social Media and Encrypted Messaging

Looking ahead, the UKGC plans to expand its research to examine the role that social media platforms and encrypted messaging apps play in facilitating unlicensed gambling. Services such as WhatsApp, Telegram, Twitch, and Kick are increasingly being used to promote gambling content, and the Commission is eager to understand how these platforms drive traffic to unlicensed operators.

Over the past year, the UKGC has ramped up its efforts to combat the black market, issuing more than 750 cease-and-desist orders and removing 50,000 URLs from search engine results. The findings from the study, to be published in 2025, will guide the next phase of the UKGC’s strategy to combat illegal online gambling and protect consumers.

Source:

“Unlicensed Gambling Using Data to Identify Unlicensed Operators and Estimate“, gamblingcommission.gov.uk, October 21, 2024.

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Canadian Study Warns Gambling Ad Regulations Are Moving Too Quickly

This-study-suggests-Canadian-regulators-should-pace-themselves-when-crafting-RG-rulesWithin a year of legalizing online gambling in Canada, a surge in public complaints about the volume and content of gambling advertisements has raised concerns. A new study released by the Canadian Gaming Association (CGA) highlights that regulators may be acting more quickly than the available evidence supports. This could result in policies that don’t adequately address the nuances of gambling advertising and may be overly broad or miss key issues.

The CGA published an academic and policy-focused study, warning that the development of gambling regulations is outpacing the research needed to effectively guide these policies. The study, conducted by GP Consulting with contributions from specialists at Eilers & Krejcik and academics from the International Gaming Institute and Washington State University, examines the current state of advertising for online gambling and sports betting.

Regulations Outpacing Research

The study’s central premise is that the evolving regulatory framework for gambling advertising in Canada is advancing faster than the research base supporting it. This, the report warns, could result in insufficiently tailored rules that fail to fully address the complex issues inherent in gambling promotion. The research team conducted a “rapid review” of 41 academic studies related to online gambling advertising and responsible gambling programs. This review is meant to serve as a resource for regulators and stakeholders as they navigate the fast-paced changes in the industry.

Ontario Leading the Charge

Ontario became the first province in Canada to launch a regulated online gambling market in April 2022, and now other provinces, such as Alberta, are expected to follow suit. Ontario’s Alcohol and Gaming Commission (AGCO) has already revised its rules on gambling advertising multiple times. Notably, a ban on the use of celebrities and athletes in gambling advertisements came into effect in February 2024, and Canada’s parliament is currently considering stricter regulations regarding when gambling ads can air on television.

The research recommends that Canadian policymakers pursue more in-depth studies in several key areas, including responsible gambling advertising, consistent measurement of exposure to ads, and the effects on vulnerable populations. The study also stresses the importance of avoiding one-size-fits-all approaches, noting that gambling advertising research from other countries, such as the United States or Australia, may not directly apply to Canada’s unique market.

Key Themes for Responsible Advertising

The authors identified five essential themes that they believe are necessary for ensuring that gambling advertising is both effective and safe:

  1. Responsible Messaging: Advertisements should avoid making false promises or encouraging excessive gambling. The study suggests that campaigns should focus on promoting responsible play rather than depicting gambling as a way to easily win big.
  2. Avoiding Vulnerable Audiences: Ads targeting youth or other vulnerable groups should be strictly limited. Regulations in Ontario already reflect this, with the ban on using celebrities or athletes in promotional materials.
  3. Promotion Restrictions: The report suggests restricting the use of enticing terms like “risk-free” in promotional content, with such offers limited only to consumers who have opted into receiving marketing communications.
  4. Affiliate Accountability: Gambling operators should be held responsible for the actions of their affiliates, ensuring that all marketing practices adhere to regulatory guidelines.
  5. Direct Marketing Controls: Gambling operators should limit direct marketing to individuals who have explicitly consented to receive such communications.

The study places these themes within the broader context of regulatory frameworks in other jurisdictions, such as the United Kingdom, Ontario, Denmark, Michigan, and New Jersey. The UK is considered to have the strictest rules, with Ontario following closely behind and Denmark, Michigan, and New Jersey rounding out the list.

Ongoing Debate and Need for Caution

The CGA’s research arrives at a critical time in the Canadian gambling landscape, as debates continue about how best to regulate gambling advertising. Although Bill S-269, which calls for a national framework for sports betting advertising, is currently stalled in federal parliament, the issue remains at the forefront of industry and government discussions. The report highlights the risk that regulations may be shaped more by public opinion and social pressures than by solid empirical evidence.

The research team emphasized that policymakers need to strike a balance between regulating gambling ads and ensuring that rules are grounded in fact-based evidence. “The approach to regulation in Ontario was shaped in part by the necessity to integrate grey market operators into a regulated framework,” the researchers noted, suggesting that regulatory bodies should remain flexible as the market continues to evolve.

Future Research Priorities

The study also lays out a research agenda for further investigation into several areas, including how to better measure the impact of gambling ads on consumer behavior, how cultural factors influence advertising effectiveness, and the challenges of conducting research in real-world settings. The authors call for more targeted studies that can inform future regulations with greater precision.

Source:

“CGA research: gambling ad regulation misaligned with evidence“, canadiangamingbusiness.com, September 20, 2024.

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New Study Reveals Gambling as Coping Mechanism in Marginalized Communities

GambleAware-analyses-links-between-gambling-and-marginalised-groupsA recent study funded by GambleAware has shed light on the troubling trend of marginalized and socially excluded communities in the UK using gambling as a means to cope with their difficult circumstances and loneliness. Conducted by The National Centre for Social Research (NatCen), the analysis reviewed 138 previous studies to understand the impact of gambling on these vulnerable groups.

The study focused on several groups, including those experiencing or at risk of homelessness, older individuals, people living with disabilities, neurodiversity or mental health challenges, criminalized communities, and migrants in vulnerable situations like asylum seekers. Despite their varied backgrounds, these groups share a common thread: the use of gambling to alleviate stressors caused by social exclusion and discrimination.

Underlying Issues and Coping Mechanisms

The research highlighted that individuals from these marginalized communities often turn to gambling to escape from issues such as loneliness, mental health struggles, stress from migration and assimilation, unemployment, job insecurity, and poverty. Gambling was perceived as a temporary distraction or a potential way to escape financial hardships.

Another significant finding was the disproportionate number of gambling venues located in deprived areas of Great Britain. People from marginalized and isolated communities are more likely to reside in these areas due to socioeconomic disenfranchisement, thus increasing their exposure to gambling opportunities.

Stigma emerged as a crucial factor affecting these communities’ gambling behaviors and their willingness to seek support. Many already face stigma related to drug use, homelessness, or mental health issues, which intersects with the stigma associated with gambling harms. This compounded stigma often prevents individuals from seeking necessary help.

Calls for Accessible and Inclusive Treatment Services

The report calls for gambling treatment services to be more accessible, inclusive, and adaptive to meet the needs of marginalized communities. It also emphasizes the need for further research to understand the specific gambling harms experienced by these groups better and to develop effective support mechanisms.

GambleAware has been proactive in addressing these issues, launching initiatives like the “Improving Outcomes for Women and Minority Communities Affected by Gambling Harm” fund. This £4 million program supports 25 organizations across Great Britain, such as Investing in People and Culture and the Flowhesion Foundation, to help ethnically diverse and vulnerable communities tackle gambling harms.

Natalie, an individual who has experienced gambling harm and homelessness, highlighted the challenges faced by those without stable housing. “To break free from gambling harm, you need to have a safe place to live. If you don’t have shelter, it makes trying to recover so much harder, and it can be difficult to access support without a permanent address. We need improved ease of access for accommodation and support, and to ensure sufficient housing options are available for people experiencing disadvantage from addiction.”

Expert Insights

Dr. Sokratis Dinos from NatCen’s Centre for Gambling Research emphasized the findings’ significance: “The results show how vulnerability to gambling harms for some people in these communities will be driven by compounding inequalities, stigma, exclusion, and discrimination.” He added that the report critically appraises existing evidence on gambling harms among marginalized communities, underlining the urgent need for targeted interventions and further research.

Sources:

New study finds that socially excluded communities use gambling to cope with discrimination, loneliness and other problems, gambleaware.org, July 30, 2024.

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Study: Sports Betting Regulations Can Have Adverse Effects, Drive Consumers Offshore

A new study concludes that sports betting regulations designed to protect athletes can have adverse impacts and drive consumers to offshore sportsbooks.

sports betting offshore sportsbook
Sports betting restrictions can drive traffic to offshore sites. That’s according to new research commissioned by the International Betting Integrity Association. (Image: Shutterstock)

The International Betting Integrity Association (IBIA) in Belgium recently commissioned a study to determine how policymakers unknowingly impact a market and fuel activity they sought to prevent through regulations. The IBIA probe was conducted by H2 Gambling Capital, a data intelligence firm based in England focused on the global gaming industry.

The study — “The Availability of Sports Betting Products: An Economic and Integrity Analysis” — makes several key assumptions based on the review. One highlight researchers discovered is that when regulators prohibit certain bets, that often prompts bettors to seek those options in unregulated markets.

“The central finding of the study is that alongside other regulatory and economic factors — including taxation and advertising policy — there is a strong correlation between the availability of sports betting products and onshore channeling,” the report’s executive summary read.

Regulations Drive Offshore Activity  

H2 Gambling said it compiled anonymized data from IBIA members in 12 markets where sports betting is allowed. Those jurisdictions included Australia, Brazil, Canada (excluding Ontario), Denmark, Germany, Great Britain, Italy, Netherlands, Ontario, Portugal, Spain, and Sweden. The US was excluded because of the bespoke regulatory model that varies from state to state.

Researchers found that when a market excludes a type of bet, with one example being a player prop, bettors wishing to make such a wager won’t simply fold on that endeavor but will instead seek a business willing to accept the bet. In the US, player props involving college student-athletes are banned in nearly all of the 38 states that have legal sports betting.

NCAA President Charlie Baker says college player props increase the likelihood of players being harassed and threatened on social media and in person. IBIA researchers, however, say banning those bets doesn’t eradicate such wagers but instead fuels bettors to offshore sportsbooks.

While politically attractive, this study confirms that bet restrictions are a blunt and counterproductive instrument,” said IBIA CEO Khalid Ali. “They don’t prevent betting; they just drive it into the unregulated market where most of the problems with sports integrity arise.”

Along with protecting student-athletes, prohibiting player props on college sports, Baker and others in favor of prohibiting such bets argue, decreases the risk to game integrity being compromised. With a player prop, a rogue bettor seeking an upper hand might buy off a student-athlete to throw a game.

More Bets, More Onshore Demand

Researchers deduced that the more betting options a market allows, the more demand there is for the regulated environment.

In Great Britain, H2 Gambling investigators calculated that 97% of sports bettors opt to make their wagers through regulated books. The UK is home to an abundance of bets, including politics.

Compare that with Germany, which restricts in-play betting and tends to allow only moneyline, spread, and over/under bets, H2 found that about 40% of bettors patronize unregulated sports betting channels.

“The evidence-based and data-driven analysis in this study shows that sports betting product restrictions adversely impact onshore channeling and that in turn has negative consequences for regulatory oversight and taxable revenues. A market that seeks to maximize the economic impact and social protections achieved via an onshore regulated framework requires a wide sports betting product availability,” the report concluded.

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Georgia Sports Betting Study Bill Introduced to Consider ‘Robust Wagering Ecosystem’

Georgia sports betting efforts failed once again during the state’s 2023 legislative session. But not all hope is lost for those who wish to bet legally on college and pro sports in the Peach State.

Georgia sports betting resolution bill
The Senate floor in the Georgia State Capitol in Atlanta. Georgia sports betting won’t be legalized in 2023, but efforts to solidify a path to legalization next year are being laid. (Image: AP)

A little more than two weeks after the odds lengthened significantly that a Senate bill seeking to authorize sports betting would advance in the Atlanta capital this year, five state Senators introduced a measure to establish a sports betting study committee.

Senate Resolution 394, a moderate bipartisan statute co-sponsored by four Republicans and a single Democrat, would create the “Senate Study Committee on the Creation of a Robust Wagering Ecosystem in the State of Georgia.” The resolution is sponsored by state Sens. Carden Summers (R-Crisp), Bill Cowsert (R-Athens), Lee Anderson (R-Columbia), Michael Dugan (R-Carroll), and Jason Esteves (D-Cobb).

Prominent gaming attorney Daniel Wallach was one of the first to break the news regarding the Georgia sports betting study bill being introduced to the state Senate.

Should the resolution find support in the Senate and House chambers, and eventually be signed by Gov. Brian Kemp (R), a 10-member sports betting study agency would be formed. The primary mission of the group would be to determine whether a constitutional amendment is needed to authorize gambling on sports.

Legal Debate Paramount

State lawmakers have expressed varying opinions on the legal process of expanding gambling. Georgia is one of the most restrictive states when it comes to permissible gaming.

Georgia is home only to a state-run lottery and certain charitable games. The state otherwise has no tribal or commercial casinos, pari-mutuel wagering, racinos, sports betting, or iGaming.

Backers of authorizing sports gambling say a constitutional amendment isn’t needed, as sports betting could fall under the scope of the Georgia Lottery. That view is shared by Harold Melton, the former chief justice of the Georgia Supreme Court, who at the request of the Metro Atlanta Chamber of Commerce in January issued his opinion on the sports betting path to legalization.

Other state lawmakers, however, aren’t so sure. They believe that the state should have a clearer legal stance before considering such a controversial matter.

Georgia senators in early March voted 37-19 against a bill to legalize online sports betting and in-person wagering at self-service kiosks. A similar bill in the House stalled in a committee as the state’s legislative deadline to pass new legislation in 2023 came and went earlier this month.

A Senate resolution to place a legislative-led ballot referendum asking Georgians if they want to allow sports betting also stalled in committee this month, though it was widely believed that the chamber didn’t have anywhere near the required two-thirds majority support to move the statute forward.

2024 Resolution

Since SR394 isn’t a bill that would permanently change the law, the Senate and House might still act on the statute. If the members do pass the resolution and create the study group, the sports betting committee would have until December 1 to present the state with its conclusions and make legislative recommendations.

“The committee shall adopt specific findings or recommendations that include proposed legislation, and the chairperson shall file a report of the same prior to the date of abolishment specified in this resolution,” the resolution text reads.

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