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economy . That ’ s a very difficult task ,” says Richard Williams , gaming lawyer and partner at Keystone Law .
In a first-of-its-kind report released last September , the UK Betting and Gaming Council ( BGC ) estimated the annual value of bets handled by the UK ’ s online gambling black market to be £ 2.7 billion . And this , it said , was a conservative figure .
Broken down further , this equates to 2.1 % of the £ 128 billion staked with licensed online operators annually . “ Those are arresting statistics ,” BGC CEO Grainne Hurst tells iGB .
“ We do have high channelisation in the UK , it ’ s the benefit of a mature market . But what we have seen is even in a mature market , the black market risk is still present and growing .”
CHANNELISATION IS KING
European gambling regulators , particularly in newer markets like Sweden and the Netherlands , have used channelisation estimates to assess the success of their legal market ’ s regulation for years . Denmark has maintained an extremely high channelisation rate of around 90 % since its online gambling market was opened in 2012 .
Today , these reports have proved a valuable resource to track the black market ’ s evolution . And these estimates could play a key role in influencing governments and law enforcement to step up actions against illegal gambling .
“ In Sweden where I live and work the channelisation discussion is like the mother of all arguments ,” says Gustaf Hoffstedt , secretary general of Sweden ’ s gambling trade body BOS . “ No other assessment [ of the licensed market ] has as much influence over the government and the authority and the discussion on how to find good ways to regulate gambling markets .”
There are notable inconsistencies in the methodology of these reports . In Sweden , there are three slightly different estimates available : one from gambling regulator Spelinspektionen , another from horse racing monopoly ATG and a third commissioned by BOS . Spelinspektionen ’ s estimate , which uses data from H2 Gambling Capital and player surveys , puts the market ’ s current channelisation at 86 %. ATG ’ s assessment , based on consumer traffic to illegal sites , puts the range at 70 % - 82 %, while the BOS-commissioned projection , which also uses consumer survey results , puts the rate right between the other two reports at 77 %.
Making the information available to the sector , the government and consumers is important to help them understand the scale of the illegal market , but there is an argument to be had over which methodology can be deemed the most accurate .
“ That ’ s obviously a very good question and I don ’ t really have a good answer to it ,” laments Hoffstedt . “ It ’ s very hazardous to believe in a single channelisation analysis . I believe that using a number of assessments from reputable sources probably comes quite close to reality . It ’ s interesting not just to assess the channelisation level , but how the level develops over time .”
HOW ACCURATE IS THE REPORTING ?
Hoffstedt believes the accuracy of the figures will improve over time through the use of various methodologies . BGC ’ s Hurst agrees : “ As this work develops , I expect [ uniform methods and practices ] will happen . But it will always be
“ We use an apples-to-apples methodology across legal and illegal sites , so we know what players were on which websites and how long they spent there ”
Ismail Vali , Yield Sec
“ How do you calculate something that ’ s not recorded anywhere ? It ’ s a bit like calculating the size of the black economy . That ’ s a very difficult task ”
Richard Williams , partner at Keystone Law
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