UKGC: The challenge of estimating illegal online gambling in the UK
The shadow world of unlicensed online betting in Great Britain remains largely invisible, and for good reason. In its latest analysis, the Gambling Commission sets out the obstacles in arriving at a credible estimate of the non-licensed online gambling market and have stated “We are not yet ready to publish an estimate.”
Why policymakers need a credible estimate
For regulators and government departments, the size of the illegal market is not an abstract curiosity. It shapes decisions on enforcement, resource allocation and the calibration of future gambling reforms. The Commission explains that estimating the market goes a long way towards “helping us understand the scale of risk posed to consumers and the public, so we can allocate existing resources proportionately.” It also allows them to “further understand the overall impact of our disruption work” and to benchmark the UK’s position internationally.
A credible estimate matters because it influences how interventions are judged. Without a baseline, it becomes harder to evaluate whether changes in regulation are shifting players towards or away from unlicensed operators. It also limits visibility on the kinds of harms that may be occurring in parts of the market where consumer protection is weakest. For policymakers, the absence of a reliable figure creates uncertainty at a time when evidence based decision making is under increasing scrutiny.
The hurdles to measurement
Much of the difficulty stems from the nature of illegal activity. As the Commission notes, “estimating amounts of illegal activity in any sector is a significant challenge, due to its nature.” Unlicensed operators are deliberately opaque, often based offshore, and make use of tools that mask location and payments.
The regulator assessed three main measurement approaches and found that all have significant limitations:
- The dwell time method attempts to convert online engagement into expenditure. The Commission warns that it “requires multiple assumptions” and that “each additional assumption adds additional margins for error, collectively these can add up to create significant uncertainty over the estimates.”
- The channelisation method compares the balance of engagement between licensed and unlicensed operators. However, “this approach also requires multiple assumptions which, when combined, introduce significant margins for error.”
- The Commission ruled out a survey based method entirely, stating “we have not pursued developing a survey based methodology as we consider the underlying data to be too unreliable” and noting that “consumers’ recall of past expenditure in gambling surveys is generally poor.”
Practical complications add further distortion. Some consumers do not realise they are using an unlicensed site. Others access offshore operators through VPNs or social media channels. Crypto wallets and alternative payment systems can also make financial flows harder to map.
What we know and what remains unclear
While the Commission cannot yet publish a market estimate, several findings help shape the wider picture. The regulator is unequivocal that the illegal market poses “a serious threat to consumers and to the integrity of the regulated market.” It also cautions that “we will never know the exact amount that is being spent within the illegal market.”
The available data does not show a clear upward trend in engagement with illegal websites, although the Commission stresses that the evidence base is thin. There are scenarios where some illegal play may not directly represent displacement from the licensed market. For example, a proportion of players may be self excluded or otherwise locked out of regulated channels.
The report also draws comparisons to other concealed markets, noting that the “secretive nature of illegal operators make precise measurement nearly impossible” and likening the challenge to estimating other underground economies.
What the Commission plans to do next
The Commission has set out a few practical steps it hopes will bring the picture into sharper focus. It plans to revisit the dwell time and channelisation models, widen the samples used in the analysis and look for stronger data sources across the regulated market. There is also an emphasis on improving cooperation with overseas regulators, payment firms and digital platforms, since much of the activity sits outside the reach of domestic frameworks.
None of these changes promise a quick fix. What they do offer is a more structured path towards an estimate that can be defended. The Commission is clear that it will only release a figure “that we judge to be credible and fit for public use,” which signals that a headline number will not appear until the supporting evidence is stronger.
What this means for the industry
The Commission’s findings leave the sector in an unusual position. Everyone accepts that the illegal market is active and poses a risk, yet no one can confidently say how large it is. That uncertainty complicates everything from enforcement planning to debates about whether regulatory tightening pushes players offshore.
Rather than filling the gap with speculation, the regulator has chosen to be transparent about what it cannot measure. It is an approach that invites operators, suppliers and policymakers to rethink what good evidence looks like in this space. Until the data improves, the most reliable tools remain vigilance, information sharing and a realistic understanding of the limits of the current evidence base.
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