Policymakers told tackling black market should be a key priority at 'pivotal moment' in illegal betting

Governments have been urged to employ a package of countermeasures to tackle the threat from the gambling black market after policy makers around the world were told they faced a "pivotal moment" when it came to illegal betting.

The message came from a report by consultants Regulus Partners which was backed by Ladbrokes and Coral owner Entain. Regulus's research follows a report last week compiled by Frontier Economics for the Betting and Gaming Council (BGC) which estimated that £4.3 billion was being staked with black market operators in Britain every year.

The BGC warned illegal gambling could cost the Treasury up to £335 million in taxation over the course of a five-year parliament.

Regulus's research analysed 12 jurisdictions alongside Britain to examine what frictions create black markets in gambling and how effective the countermeasures are. It found that while the UK has historically had a relatively low level of black market participation there was "clear evidence that this is growing" and claimed there were "clear reasons" why, including avoidance of financial scrutiny caused by affordability checks and price frictions in bonuses, free bets and other financial limits.

Regulus said that Britain's low level of participation meant that countermeasures against the black market had not been used to their full potential. It warned it believed the Frontier Economics estimate for online black market gambling stakes of £2.7bn was "conservative and likely to grow".

However, Regulus said there were five tools that could be used to channel customers to the domestic market, including blocking payments to black market operators while working with banks to ensure legitimate customers can gamble.

Regulus also recommended restrictions on mainstream and social media advertising; blocking the IP addresses of operators and using the new Online Safety Act; stepping up criminal enforcement and creating a public blacklist to educate consumers.

Entain chair Barry Gibson: "This is a pivotal moment"

The report was unveiled to a gambling industry event in Lisbon on Tuesday by Entain chair Barry Gibson, who said that "legal and regulatory countermeasures can be highly effective as long as the domestically regulated product offer remains attractive".

He added: "Taking on the black-market operators should be a key priority for policymakers around the world. It will tackle crime and raise money which could be spent on critical areas such as healthcare, education, and infrastructure. It would ensure that customers get greater protection from playing with fully regulated and legitimate operators.

"This is a pivotal moment; if we go down the route of further tax increases rather than tackle the black market, it will drive even more customers towards unscrupulous operators and damage responsible, regulated businesses."

Last week the BHA called on the government to "carefully consider" the threat of illegal betting following the publication of the Frontier Economics report.

The governing body said any changes to gambling regulations should strike the "correct balance between consumer freedom and protection" and that any roll-out of affordability checks must be fully frictionless to help prevent the growth of the black market.

Read these next:

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