UK Gambling Commission finds problem gambling seven times as common on illegal sites

Problem gambling is seven times as common among people who use illegal online gambling sites in Britain as among those who use licensed ones, according to new UK Gambling Commission research. The regulator found that 45% of players with transactions at illegal operators scored eight or higher on the Problem Gambling Severity Index, the highest risk band, against 6% of those whose transactions went to licensed sites, Casino.org reported.

SBC News carries the same headline figures from the study, which it places in the same week as the government budget that raised Machine Games Duty to 25%, on top of an earlier increase in online gaming tax.

What the research measured

The Commission's paper examined banking transactions recorded between July 2018 and July 2026, using financial tracking data supplied by YouGov. The dataset covered 157.2 million transactions from roughly 38,000 people. From that pool, researchers identified 3,426 transactions believed to involve illegal operators, linked to 179 individuals.

Casino.org reports a second risk band: 17% of illegal site users scored between three and seven on the PGSI, against 9% of licensed customers. SBC News gives those same figures as 16% and 8%. SBC News describes the sample as small, and notes that PGSI scores were held for 146 of the 179 people, most of them male, with an average age of 44.

The Commission said its findings do not establish whether using illegal gambling websites causes greater gambling harm.

Illegal play sits alongside licensed play

Ninety-one per cent of people with repeated transactions at illegal operators also gambled with licensed companies. The Commission found little evidence that customers left regulated sites after starting to gamble illegally. "Illegal gambling is embedded within existing gambling behavior rather than triggering a sustained shift away from the licensed market," the report concluded, as quoted by Casino.org.

Among the 122 people with at least two detected illegal transactions, licensed activity barely moved: an average of 24.8 licensed transactions in the month before the first illegal one, and 23.7 in the month after. SBC News reports the illegal side of the ledger separately, with those users making 4.9 transactions to unlicensed firms in the first month, then 1.8, 1.4, 1.9, 1.2 and 1.5 across the following five.

SBC News suggested the higher concentration of at-risk players at illegal sites may reflect self-excluded customers finding non-Gamstop sites and circumventing their exclusion from the regulated market.

Why bank records are a blunt tool for finding illegal sites

Matching known illegal operator names against banking descriptions produced limited results. Black market operators rarely put their real business names on financial descriptors, so investigators relied instead on recognised merchant categories and known transaction codes. Bank ledgers do not track cryptocurrency transfers or payments through alternative networks, and the Commission said its work could not establish the size of Britain's illegal gambling market.

Others have been less cautious. In August, the Betting and Gaming Council warned that black market betting on the Premier League would reach £1 billion ($1.36 billion) by the 2027/28 season, Casino.org notes.

An industry argument and its complication

Dan Waugh, a partner at the gambling advisory firm Regulus Partners, told SBC News the survey was small scale, but that its direction matched what other research has found. "The results showing that people playing in the black market are significantly more likely to be at risk of harm are consistent with the wider research literature," he said. "They reinforce concerns about growth in unlicensed gambling."

A spokesperson for Flutter UKI, which operates Paddy Power, Betfair and Sky Bet, said: "The Gambling Commission figures highlight why it is so important for the government and the regulator to tackle the illegal and unlicensed market." An industry source quoted by SBC News, who was not named, put it shorter: "You can't hope a problem away."

The overlap runs both ways, and SBC News drew the second conclusion itself: if transacting with illegal firms is a marker of harm, then a substantial number of people showing that marker are still active with licensed operators, which puts the duty of care question back on the regulated market. The same outlet noted that lotteries are excluded from the 6% licensed figure, which it says may frustrate some bookmakers and casinos, which have long argued that the National Lottery should be held to the same standard they are.

On the evidence published so far, the numbers show an association between illegal site use and gambling harm. The Commission's own caveat, and the payment data it could not see, leave the question of cause and the scale of the market open.