Report
Illegal online gambling: Challenges of estimating the size of the illegal gambling market
The final chapter of the Gambling Commission's research into the illegal online market, focusing on challenges estimating the size of the market.
Channelisation rate approach
Key point summary
The key points for this section are
- ‘Channelisation rate’ is an internationally recognised term. It refers to the amount of gambling activity which takes place through legal ‘channels’ compared to illegal ones. The higher the channelisation rate, the more activity is undertaken through the legal market
- comparative data can be obtained for legal websites in the same way we collect data to estimate engagement with illegal gambling. This approach has the benefit of involving fewer assumptions than the ‘dwell time’ approach. More work is needed, however, to verify our estimates using data from the licensed market
This section explores the ‘channelisation’ approach to estimating the size of the illegal gambling market. At a high-level the methodology involves:
- creating an estimate of engagement with illegal websites using the methodology set out in Illegal online gambling: Consumer engagement and trends
- the same methodology can be applied to collect data on engagement with all regulated, and therefore legal gambling websites
- the 2 estimates can be combined – allowing a comparison between legal and illegal ‘channels’ for engaging with gambling: this allows calculation of a ‘channelisation rate’ for illegal gambling compared to legal activity
- using data on Gross Gambling Yield (GGY) associated with legal online gambling as a starting point to estimate GGY from illegal channels
- applying assumptions to reflect differences between consumer behaviour on legal and illegal channels.
The following sections provide further detail on each stage of the methodology and key assumptions.
Estimating engagement with the legal market
We have created a list of all websites associated with operators licensed by the Gambling Commission. This information is taken from the public register of operators from our website1 . We can use SimilarWeb to obtain estimates of numbers of visits and visit duration. There are still some limitations, however, that need to be considered.
We note that legal gambling takes place via Apps as well as through websites . Although some illegal gambling activity is facilitated through Apps, we do not typically observe App-based versions of the illegal websites we identify from web searches and from affiliate platforms. Given the likely strong degree of App-based spend in the legal market, we also need to obtain web traffic data for both Apps-based and website-based engagement with legal sites. SimilarWeb provides estimates of both. Ideally, we would benefit from operators’ insights to help us verify the accuracy of these estimates.
Applying published data on legal online GGY
We collect and publish data on online GGY for the legal market. The key limitation to apply this to generate an estimate of GGY for the illegal market relates to the margins of error associated with each estimate.
As seen in Illegal online gambling: Consumer engagement and trends – the margin for error associated with our estimates for the illegal market are significant. Although this still provides a useful basis for understanding broad trends, absolute figures need to be treated with caution. Similar margins for error exist for data on engagement with legal websites. When combining 2 data points, both with significant margins for error, the uncertainty for accuracy of the ratio between these 2 datasets will be even greater.
A small percentage difference in a channelisation rate equates to a very large amount of GGY. For example, latest Industry Statistics covering the period April 2023 to March 2024 shows a total online GGY of £6.9 billion. If channelisation rate estimates are out by just 0.5 percent, this would a difference of £34.5 million in the associated estimate of GGY.
Differences in expenditure on illegal and legal
Once accuracy of engagement estimates has been improved to the point GGY data can be applied in a reliable way, a key assumption will need to be applied to reflect how patterns of expenditure differ on illegal sites compared to legal ones. The ‘channelisation rate’ reflects data on engagement – but a given amount of engagement may lead to different levels of expenditure for illegal gambling.
As discussed previously, the direction of this difference is only understood anecdotally, and we do not have robust evidence to support a more refined assumption. Further consumer research will be required to achieve this.
Summary
This approach has the potential to provide useful insights, but more work is needed to verify the accuracy of estimates of web traffic and App use in the legal market to allow reliable channelisation rates to be estimated.
One of the key potential advantages of the channelisation approach is that we can use the opportunity to explore seasonality in the well-established datasets on legal gambling – and assess the extent these can be observed in illegal channels for engagement.
Estimating engagement with legal websites and Apps
Data source: SimilarWeb.
Effect on reliability: Medium - Web traffic estimates can be obtained through Simlarweb. There are opportunities to calculate and verify margins of error associated with these estimates.
Opportunities to improve: We can collaborate with operators to verify the accuracy of Similarweb estimates of web traffic to licensed websites and explore the differences between estimates of website and App-based traffic.
Applying GGY data on the legal market
Data source: Similarweb and Market Insight data.
Effect on reliability: High - GGY data can be applied from the legal market – margins for error, however, increase when 2 estimates are combined.
Opportunities to improve: We can collaborate with operators to verify accuracy of Similarweb estimates and put ourselves in a better position to explain margins for error this will provide a stronger basis for applying data on GGY.
Accounting for differences in consumer behaviour between legal and illegal channels
Data source: Similarweb and Market Insight data.
Effect on reliability: High - We do not currently have data to allow us to make a reliable estimate. Anecdotally, we expect behaviour to be different – but this will differ for consumers with different motivations and awareness of using illegal websites.
Opportunities to improve: More consumer research to understand differences between illegal and legal gambling behaviour.
Dwell-time approach - Challenges of estimating the size of the illegal gambling market Next section
Conclusions and next steps - Challenges of estimating the size of the illegal gambling market
Last updated: 6 November 2025
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1 Public registers and datasets, Gambling Commission