The UK Gambling Commission’s latest research highlights a significant overlap between problem gamblers’ activity in both the regulated and unlicensed gambling markets. The findings challenge the assumption that individuals with gambling problems abandon the legal sector entirely for the black market.
Research Reveals Overlap in Gambling Behaviour
According to the Commission’s study, 91% of repeat black market users still participate in the regulated gambling sector. This insight is based on a subset of 122 individuals from a broader Open Banking dataset encompassing 38,000 participants over eight years. The data suggests that most problem gamblers do not fully migrate to illegal operators but continue to engage with licensed platforms as well.
Higher Black Market Engagement Among Problem Gamblers
The research also found that 45% of individuals with a Problem Gambling Severity Index (PGSI) score of eight or higher had transacted with illegal operators. In contrast, only 6% of those with high PGSI scores reported gambling with regulated operators, possibly due to self-exclusion. The study reinforces concerns that the black market attracts those at higher risk of gambling harm, offering little to no player protection.
Implications for Operators, Affiliates, and Regulators
The findings come as regulated operators face increasing challenges in competing with the unlicensed sector, particularly with the introduction of Financial Risk Assessments (FRAs). The Gambling Commission has outlined phased implementation of FRAs, starting with the largest operators and specific deposit thresholds. While the Commission expects most accounts to remain unaffected, industry representatives have raised concerns about added friction for customers and the risk of further migration to the black market. Both the Betting and Gaming Council and the British Horseracing Authority have criticised the approach, warning of potential unintended consequences for operators and the wider industry.
Key takeaways
- UKGC research shows most problem gamblers use both legal and illegal gambling sites.
- 45% of high-risk gamblers transacted with illegal operators, raising safeguarding concerns.
- Financial Risk Assessments will be phased in, with industry groups warning of black market risks.
- Regulated operators face challenges balancing compliance and customer retention.
Update (02.11.2026)
The study further revealed that 17% of illegal gambling users scored between three and seven on the Problem Gambling Severity Index (PGSI), compared to just 9% among licensed customers. Analysis of 157.2 million banking transactions from around 38,000 individuals between July 2018 and July 2026 identified 3,426 suspected illegal gambling transactions involving 179 people. Notably, among 122 individuals with at least two detected illegal gambling transactions, their average monthly transactions with licensed operators remained relatively stable before and after their first illegal payment. The UKGC also highlighted significant challenges in identifying payments to unlicensed operators, as these businesses rarely used their real names, prompting investigators to rely on merchant categories and transaction codes to trace suspicious activity.