Gambling Commission data shows illegal-site bettors keep using licensed operators

The Gambling Commission has published its first study tracking spending through open banking rather than relying on surveys, giving regulators payment-level evidence on Britain's illegal gambling market for the first time.

The report, released on 28 October, found that problem gambling scores are far higher among people paying unlicensed operators than among customers who stick to licensed sites, underlining the concentration of harm in the black market.

The more unexpected finding concerns behaviour rather than harm. Looking at customers whose payments to illegal operators were repeatedly detected, the Commission found that 91% of them also held a history of gambling payments to licensed operators, and that spending with those licensed operators held broadly steady once the illegal payments began.

That pattern suggests illegal gambling is being added on top of licensed play for most of these customers rather than replacing it outright, a reading the regulator itself points to.

The Commission has been explicit about the limits of the exercise. A payment firm's categoriser classified any transaction with a gambling probability above 50% as gambling, and only accounts supporting open banking were captured, meaning cryptocurrency payments are excluded entirely. The method also only detects payments to some illegal operators, and the Commission has said the panel is not nationally representative, cannot size the illegal market and cannot prove that illegal sites cause the harm measured.

Separate Commission research helps explain how players reach unlicensed sites in the first place. Its Phase 3 Consumer Voice study, published on 20 October 2026, identified searches for sites 'not on GamStop' as a principal route into the illegal market, a phrase the Commission says has become shorthand among players for lighter checks, quicker withdrawals and alternative payment methods. Fieldwork for that survey, which questioned a panel of 4,007 people who had placed an online bet within the previous month, ran across the first half of May 2026.

The timing places the findings squarely inside the budget debate over gambling taxation. Online gaming duty has stood at 40% since April 2026, and the Betting and Gaming Council has argued that further increases will push more players toward unlicensed sites that pay no UK tax and offer none of the safeguards required of licensed operators.

BGC chief executive Grainne Hurst has pointed to projections suggesting a 25% rate could threaten close to 9,000 jobs and tip almost 1,000 betting shops and casinos into closure or serious risk of it. H2 Gambling Capital has separately forecast that the illegal market will keep growing as tax rises erode the competitiveness of Britain's regulated sector, projecting that more than one in five pounds staked online could sit with illegal operators by 2031.

The Commission's new payment data does not resolve that argument either way. Operators can point to the elevated harm scores among illegal-site customers as evidence of what regulated protections are meant to prevent, while campaigners can cite the 91% overlap figure as evidence that higher taxes are not driving a mass exodus from licensed platforms.

Attention now turns to April 2027, when general betting duty is due to rise to a higher rate, a change likely to reopen the same dispute over whether taxation pushes players toward the black market or whether most simply gamble in both places at once.