UK gambling regulator finds high harm among black market users

The UK Gambling Commission has published a study using open banking data that links payments to unlicensed gambling sites with a heavy concentration of gambling harm. The report, published on October 28, found that among people paying unlicensed operators, problem gambling scores are far higher than among customers of licensed sites. The research tracks spending through open banking rather than relying on surveys alone. Its findings land during a debate over whether tax increases on the regulated sector push players toward the black market.

The study's more striking behavioural result shows that among people with repeated detected payments to illegal operators, 91 percent also gambled with licensed operators. Their licensed transactions did not fall substantially after their first illegal payment. The regulator suggests this pattern is consistent with illegal gambling being added to licensed play rather than replacing it. The Commission's separate Phase 3 Consumer Voice research, released on October 20, 2026, named searches for sites 'not on GamStop' as a main path to the illegal market.

The industry group Betting and Gaming Council has previously linked higher taxes directly to growth of the black market. Chief executive Grainne Hurst argued that higher taxes on the regulated sector will make the illegal market more attractive, as it pays no UK tax and offers no licensed safeguards. The BGC has cited projections warning that a 25 percent rate could put almost 9,000 jobs at risk and leave almost 1,000 betting shops and casinos closed or at serious risk of closure. The new data complicates that argument. Operators can point to the concentration of harm among illegal-site users as evidence of what is at stake, while campaigners can point to the 91 percent figure as evidence that players are not simply abandoning the regulated market. The Commission itself noted clear limits to its findings, stating the panel data is not nationally representative and cannot give a definitive picture of the illegal market's size or prove that illegal sites cause the harm.

The study's methodology rests on a narrow base. A payment firm's categoriser sorted transactions, counting any payment with a gambling probability above 50 percent as gambling. Only accounts that support open banking are included, leaving out cryptocurrency payments, and the method detects payments to only some illegal operators. The survey for the Phase 3 research covered 4,007 people who had gambled online in the previous four weeks, with fieldwork conducted between May 1 and 15, 2026. The report arrives as the sector is still absorbing earlier tax increases, with online gaming duty at 40 percent since April 2026. The next test for the industry arrives in April 2027, when the general betting duty is scheduled to move to a higher rate.