The Gambling Commission's first open banking study of the black market links unlicensed sites to a heavy concentration of gambling harm. Most repeat users keep betting with licensed operators, which complicates the industry's case that tax rises simply push players offshore.
The UK Gambling Commission has put payment data behind the debate on the black market. Its report, published on 28 October, tracks spending through open banking rather than surveys alone. The headline finding concerns harm. Among people paying unlicensed operators, problem gambling scores are far higher than among customers of licensed sites.
The study rests on a narrow base. A payment firm’s categoriser sorted the transactions, and any payment with a gambling probability above 50% counted as gambling. Only accounts that support open banking are included, so cryptocurrency payments are left out. The method also detects payments to only some illegal operators.
Illegal play sits on top of licensed play
The more striking result concerns behaviour. Among people with repeated detected payments to illegal operators, 91% also gambled with licensed operators. Their licensed transactions did not fall substantially after their first illegal payment.
That pattern is consistent with illegal gambling being added to licensed play rather than replacing it. It does not fit neatly with a picture of customers abandoning the regulated market wholesale. The regulator suggests the same reading.
The route in matters too. The Commission’s Phase 3 Consumer Voice research, released on 20 October 2026, named searches for sites ‘not on GamStop’ as a main path to the illegal market. The phrase has become shorthand for fewer checks, faster withdrawals and other payment options. That survey covered 4,007 people who had gambled online in the previous four weeks, with fieldwork between 1 and 15 May 2026.
The findings come with clear limits. The panel data is not nationally representative and cannot give a definitive picture of the illegal market, the Commission said. Nor can it measure the market’s size or show that illegal sites cause the harm.
Tax rises sharpen the fight over the evidence
The report landed in Budget week. The sector is still absorbing earlier increases, with online gaming duty at 40% since April 2026.
The Betting and Gaming Council has linked those costs directly to the black market. Chief executive Grainne Hurst argued that higher taxes on the regulated sector will make the illegal market more attractive. That market pays no UK tax and offers no licensed safeguards. Citing projections, the BGC warned that a 25% rate could put almost 9,000 jobs at risk and leave almost 1,000 betting shops and casinos closed or at serious risk of closure.
H2 Gambling Capital forecasts the harmful illegal gambling black market will continue to grow as higher betting taxes make Britain's regulated market less competitive.
By 2031, more than one in every five pounds staked online could be with illegal operators.
That's bad for…
— Betting and Gaming Council (@BetGameCouncil) July 22, 2026
The new data cuts both ways for that argument. Operators can point to the concentration of harm among illegal-site users as evidence of what is at stake. Campaigners can point to the 91% figure as evidence that players are not simply leaving. Neither side can claim the report settles the question.
The next test arrives in April 2027. General betting duty is scheduled to move to a higher rate that month.
Source material
- What the Gambling Commission's open banking study shows about UK players (Yaspa)
- UKGC study: Illegal gambling supplements rather than replaces licensed activity (Next.io)
- UKGC Maps Illegal Gambling Push Factors (iGaming Express)
- Machine games duty rise brings relief for investors but leaves closures on the table (iGaming Business)
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