Who’s really at risk? Unpacking migration to the gambling black market in GB

The UK’s online gambling industry has found itself at a pivotal crossroads. The rise in illegal, unlicensed operators has triggered industry-wide concern over the perniciousness of the black market – not only for economic reasons but also for the dangers it poses to vulnerable players.

Recent research published by the Gambling Commission has sparked a critical discussion around two pressing questions: Who is truly at risk of migrating to the black market? And what should be done about it?

The answers are both complex and troubling.

A key finding in the Gambling Commission’s report on illegal gambling challenges the narrative that only self-excluded individuals and underage users are susceptible to black market activity.

Research reveals that the demographic profiles of legal and illegal gambling consumers are nearly identical – primarily men, younger individuals aged 18–24, frequent gamblers and those scoring 8+ on the Problem Gambling Severity Index (PGSI).

A recurring theme in the Gambling Commission’s research is the lack of public understanding around regulation. Elizabeth Dunn, partner at legal firm Bird & Bird, says this is a core concern.

“One thing that stands out is the commission’s acknowledgement of the disconnect between consumers recognising the importance of licensed operators and their actual understanding of how to verify licensing status,” Dunn tells iGB. “This may be partly due to lack of consumer awareness, but also an indicator of the increase in sophistication of the black market in recent years.”

Alasdair Lamb, senior associate at legal firm CMS, highlights a standout finding in the report: “That engagement with illegal sites is usually supplementary rather than exclusive, with most respondents reporting that they prefer spending time and money on legal websites.”

An opportunity and a responsibility

Elizabeth Dunn adds that this presents both an opportunity and a responsibility for regulators and operators to engage in more consumer-facing education campaigns to close the gap – an observation which is in line with the Gambling Commission’s recommendations.

This point is echoed by the Betting and Gaming Council (BGC), which cites a recent Frontier Economics study estimating that 1.5 million Brits are now gambling with illegal sites – reportedly spending up to £4.3 billion annually.

“Illegal gambling websites appeal to a worrying range of customers,” a BGC spokesperson said. “More than one in five 18–24-year-olds who bet already use unsafe, unregulated sites. Many black market sites specifically target the most vulnerable, including those who have self-excluded from regulated betting firms.”

The BGC warns that without balanced regulation and stable taxation, more consumers – including mainstream ones – may be pushed into riskier territory, undermining public safety while siphoning money away from licensed operators and, ultimately, the Exchequer.

Challenges to the commission’s report

The results in the Gambling Commission’s report clash with interpretations presented at recent events, such as the Peers for Gambling Reform forum, where it was suggested that only self-excluded players and children were at risk of migrating to the black market.

According to Ismail Vali, CEO of Yield Sec, it is a case of misinterpretation on the Gambling Commission’s behalf – partly, he explained, because the commission’s survey does not include minors in its data.

His company uses military-grade data surveillance to track online black market behaviour in the UK. It has also produced a report on the subject, which was released in early September.

“It clearly shows that the people who are engaging with illegal gambling are people who have no other option. Of all the illegal gambling promotion in the UK, 84% of it is ‘not on GamStop’ search-driven. Yes, there is some mainstream marketplace movement towards illegal gambling in the UK, but generally, where the money is coming from is from children and self-excludes.”

He stresses that data brokers, social media algorithms and SEO manipulation are being used to directly target those who have self-excluded or shown signs of addiction.

Yield Sec’s findings claim that the black market in the UK has exploded – from 0.43% of the market in 2020 to nearly 9% in 2025 – driven by both targeted marketing tactics and regulatory pressure on legal gambling operators.

In its own report, Yield Sec finds that there are currently more than 500 illegal sports betting and casino operators actively targeting the UK, and more than 1,100 affiliates promoting illegal operators.

Exploitation of vulnerability

At the centre of the black market debate is GamStop, the UK’s national self-exclusion scheme.

GamStop – which since 2018 has had more than 600,000 users registered for self-exclusion from all UK-licensed sites – acknowledges that stopping illegal enterprise is a major challenge but maintains it is taking steps:

“We recognise that there is more work to do to remove all advertising of casinos bypassing GamStop and to prevent the advertising in the first place. We are in regular contact with the Gambling Commission’s intelligence and enforcement team, we welcome the Crime and Policing Bill, which will give the Gambling Commission greater powers to act swiftly to take down IP addresses and domain names associated with illegal websites.”

GamStop also points to an Ipsos evaluation of users of unlicensed operators:

“Just 8% of more than 4,600 users said they were using unlicensed or illegal gambling operators. While the activities of black-market operators are a concern, it is important we keep the issue in perspective,” said the spokesperson.

This response from GamStop does not sit well with the Yield Sec CEO, who sees it as a downplaying of a pressing issue.

“If you look at the trajectory in Great Britain, it’s frightening. Since we first talked about this in 2020, it has doubled every year. And now we’re at this horrible height,” said Vali.

He warns that the number of users on illegal platforms will likely continue to grow unless the problem is properly managed – especially in a time when illegal TV and film streaming sites (where illegal gambling sites tend to advertise) are becoming more popular. This is another factor expected to impact the mainstream marketplace.

Where does the responsibility lie?

Overall, said Vali, the responsibility for a safer online gaming environment in the UK lies with the Gambling Commission and GamStop.

“If you set up a scheme like GamStop and you tell vulnerable customers they are safe, surely you should make them safe,” he adds. “And they are not safe in Great Britain right now.

“Go after the supply chain, go after the advertising, go after the social media content. That’s what you can change right here, right now, today.”

Elizabeth Dunn from legal firm Bird & Bird emphasises the regulatory challenge for the industry.

“The primary challenge remains the commission’s limited ability to take effective action against offshore unlicensed operators,” she suggests. “The regulator has increasingly focused on the regulated B2B market to prevent game supply to unlicensed operators and I expect this approach to continue.”