Hidden Bets, Real Risks: What Illegal Gambling Means for Players and Operators

_{Caption: Measuring the size of the illegal online gambling market is complex. (Image: Alamy)}

Estimating the size of the illegal online gambling market sounds simple enough, until you try to do it.

As Ben Haden, Director of Research and Statistics at the UK Gambling Commission (UKGC), explains,

 “Measuring the size of the illegal gambling market is difficult. That’s not an excuse. It is the reality of attempting to objectively measure an activity that is largely hidden.”

Illegal gambling leaves little reliable data behind. Researchers must rely on assumptions, and small errors can quickly multiply. Haden compared it to government efforts to calculate losses from illegal tobacco sales, an equally shadowy market where activity is designed to avoid detection.

Critical to Understand the illegal Market

Understanding the true scale of illegal gambling isn’t just an academic exercise. It’s critical for players, operators, and governments alike.

For players, unlicensed sites often look legitimate but offer no protection against fraud, unfair odds, or withheld winnings. They also bypass safer gambling tools, putting vulnerable users at higher risk.

For operators, illegal platforms create unfair competition and weaken trust in the legitimate market. And for governments, every illegal bet represents lost tax revenue and increased enforcement costs.

“Although legal and illegal is a clear-cut definition to us as a regulator, consumer perceptions are more fluid,” Haden said, noting that some gamblers may not realise they’re breaking the law when they visit an unlicensed site.

The Data Dilemma

In its recent report, the UKGC outlined why this problem persists: limited visibility, patchy data, and compounding uncertainty.

Turning website traffic or engagement into spending estimates requires layers of assumptions. Each layer increases the margin for error, leaving researchers without the confidence to say how large the illegal market really is.

The Commission’s earlier Report Two examined how often consumers engage with illegal gambling websites. The results revealed trends but also highlighted how difficult it is to interpret them. 

“As a public body it is vital that we communicate uncertainty associated with our research and issue health warnings where necessary,” Haden said.

Fighting Back

Even with imperfect data, the UKGC isn’t sitting still. Its third report outlines disruption tactics aimed at making illegal gambling harder to access, from domain blocking and financial transaction monitoring to partnerships with tech companies, regulators, and banks.

“Measuring the scale of illegal gambling will help tell us if our work is having an impact and demonstrates to other stakeholders the need for action,” Haden said.

Progress, however, depends on collaboration. Operators can help by sharing anonymised market data to improve estimates. Digital industries and payment providers can enhance detection. And governments can strengthen cross-border regulation to keep up with fast-moving offshore operators.

For players, the takeaway is simpler: stick to licensed online casinos. If a site isn’t approved by the UKGC, Malta Gaming Authority, or another recognised regulator, it’s not worth the risk.

What We Know, and What We Don’t

The research confirms a few things:
    •    Illegal gambling has always existed and adapts quickly to enforcement.
    •    Many who gamble illegally do so unknowingly or because they’re self-excluded from legal markets.
    •    The UKGC hasn’t seen sustained growth in illegal site use, despite public fears of a booming black market.

Still, the Commission stresses that the risks remain serious. Illegal operators can change domains or payment methods overnight, and consumers have little recourse when something goes wrong.

The Road Ahead

Haden’s team is now breaking the problem into smaller, measurable parts, analysing transaction flows, site activity, and enforcement outcomes, to produce data that policymakers and operators can rely on.

“Consumers expect regulation in the legal market that offers appropriate levels of protection and fairness,” Haden said. 

“Lowering regulatory standards is not a credible way to tackle the risks of the illegal market.”

For Casinos.com readers, the message is clear: players, operators, and regulators all share a role in keeping gambling safe and fair. Measuring the illegal market may never be perfect, but every insight helps reduce harm and strengthen trust in the legal casino industry.