Unlicensed Gambling – Our approach to tackling unlicensed gambling
Our Chief Executive Andrew Rhodes shares details on the Commission's approach to tacking unlicensed gambling.
Posted 21 October 2024 by Andrew Rhodes
Tackling unlicensed gambling is central to our objective of preventing gambling from being a source of crime. Our Corporate Strategy commits us to increase investment, resources and capacity to tackle illegal gambling. 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.
We are particularly vigilant and active in our work to disrupt this market and through collaboration with others, have made good progress in frustrating illegal online operators. We’ve done this by getting URLs removed from search results, choking off payments and stopping games and products being accessible on illegal sites.
But we also understand that there are concerns that when new regulations are introduced, there is a risk that some consumers might be displaced. The solution is not to avoid bringing in well targeted and proportionate new regulations - especially where there are clear problems that need to be solved in improving our regulatory regime - we must also ensure that we avoid any unintended consequence of increased use of unlicensed operators.
Minimising the potential for harm from unlicensed operators is of high importance, as our own research shows that some of its main targets include people who are self-excluded or have otherwise had customer relationships terminated by operators, or where they are pursuing things not available to them in the legal market, despite the British market having extremely high levels of liberalisation and products being offered online. Those targeted are sometimes vulnerable customers – but they have been given a route back to gambling by unlicensed operators.
How we are tackling this market
We are committed to making it difficult to provide illegal gambling at scale to consumers in Great Britain.
Over the last couple of years at the Commission we have increased the resources we dedicate to tackling it. But we have also looked to go further than just using our own powers. We have collaborated with other regulators, with operators, and also with payment providers, internet search providers and all parts of the supply chain to prevent illegal operators from being able to operate at scale.
This volume of our disruption activity is demonstrated through our performance metrics, which we publish quarterly. And this work is showing results:
- since the start of April this year, the Team has issued over 750 Cease and Desist and disruption notices - this includes 259 cease-and-desists issued to operators and 189 to advertisers
- over that same period the Commission has referred over 78,000 URLs to Google with 50,000 of these removed by the search engine, and 255 websites taken down. This is more than a tenfold increase in URL takedowns in comparison to the whole of 2023 to 2024.
What else have we been doing to tackle illegal markets?
- analysing and understanding white label offerings, with help from groups like the International Association of Gaming Regulators, will open new chances for a coordinated global response
- we all need to help build stronger knowledge and data about key players and locations of illegal gambling sites
- collaborating locally and globally to share knowledge and coordinate efforts, like removing content through Google and contacting hosts/registrars via the Internet Corporation for Assigned Names and Numbers (ICANN)
- expanding test purchasing activities and build ties with the financial sector to target beneficiary accounts
- through our role in the International Association of Gaming Regulators (IAGR), we are making progress on data sharing and collaboration across countries, including Australia, Hungary, Lagos, the Netherlands, Mississippi, and New Jersey.
Taking an evidence-led approach
Increased use of data analytics is at the heart of our corporate strategy. We are building our capacity to use data to make regulation more effective - and we are already deploying this in our work to tackle unlicensed gambling.
Disruption and enforcement work is most effective when it is well targeted – the methodology paper we have published today explains how we are using data analytics to identify more unlicensed operators and automate these processes to free up more resources in our enforcement and intelligence teams to disrupt this market.
And we know we aren’t the only ones looking to improve the data in this space. We are also looking at recent papers that have examined some of the same questions, and we are talking to the organisations behind that work where we have questions. But as the regulator for gambling in Great Britain, it is important that we develop and build up our own capacity to identify unlicensed operators.
Today’s methodology paper is the first step in sharing this work and we are committed to publishing more as it develops.
Now, as well as the operational benefits we’ve already highlighted, the new data will, in time, allow us to publish more metrics on unlicensed gambling. We know that the data is of greatest value in terms of showing the dynamics of this market – such as changes in customer activity from month-to-month. Once a fuller, more robust time series is available, we will publish our findings and outline the conclusions we have drawn.
In addition to our work with data, it is important to reflect the experiences of people who gamble via the unlicensed market. We are currently conducting research with consumers through our Consumer Voice programme to better understand the pathways into the unlicensed market, and consumers’ drivers and motivations for using unlicensed websites. It is also exploring the experiences of consumers who are not aware that the sites that they are using are not licensed.
One outcome of this research is to get a better understanding of the right questions we can use in consumer research to supplement our other data sources and include these in the Gambling Survey for Great Britain (GSGB) to allow improved monitoring over time.
The work is still in progress, with the qualitative phase completed. We will be using the findings from this phase to inform the next phase of the work, with all the findings due to be published in 2025.
What happens next?
The focus of our illegal markets plan will be improving processes, particularly by developing new workflows to address closed group illegal offerings. A new cease and desist process will be introduced to target the growing trend of "prize draws and competitions," which has raised concerns across several departments, including HM Revenue and Customs (HMRC), the Department for Culture, Media and Sport (DCMS), and the National Crime Agency (NCA).
A key development in the plan involves expanding the partnerships with search engines. Beyond the existing collaboration with Google through the government portal, the Commission has now established a working relationship with Microsoft. This partnership will replicate the successful referral process with Google, extending it to include Bing, Yahoo Finance, and other Microsoft-powered search engines within Great Britain by October 2024.
These processes have already been shared with overseas regulators, helping them connect with their relevant Single Point of Contact (SPOC) at Google, and will soon be expanded to Microsoft, providing comprehensive search engine coverage for the British public.
Additional efforts will include test purchasing activities and ongoing contact with payment providers to detect and prevent illegal transactions. The Commission will also continue to engage with external partners, such as law enforcement agencies, the Police Intellectual Property Crime Unit, and HMRC, to strengthen its efforts.
In terms of building our evidence base, our work with data will continue. The methodology paper we have published sets out the options we are considering.
I would like to thank the operators, other regulators and stakeholders who have helped us in this work to date. I would also reiterate the call set out in the paper, for those with access to other useful data to get in touch and discuss their ideas on how it could be used or benefit from data sources not currently open to the Commission.