The UK Gambling Commission has published its first open banking study of the illegal gambling market, finding that 91% of people with repeated payments to unlicensed sites also gambled with licensed operators during the same period. The data, released on 28 October, lands in the middle of a Budget-week argument over whether rising gambling taxes are pushing players towards the black market.
What happened
The UK Gambling Commission has put payment data behind the debate on the black market, with a report published on 28 October that tracks spending through open banking rather than surveys alone.
The analysis drew on a dataset gathered by YouGov, covering
Open Banking transactions from 38,000 individuals between July 2018 and July 2026, shared with informed consent and used anonymously for research.
Licensed transactions were flagged using
an algorithm developed by Yaspa, with the analysis supported by the Commission’s collaboration with Warwick Business School.
Within that larger sample, the Commission isolated a much smaller subset directly tied to illegal operators.
The report identified 3,426 transactions involving suspected illegal operators, linked to 179 individuals.
Among this group,
91% of those with repeated detected illegal gambling transactions also used licensed operators, and researchers found no substantial decline in licensed gambling transactions after consumers first engaged with illegal operators.
A narrower slice of 122 repeat users showed little change in behaviour either side of their first illegal payment, with
licensed transactions averaging 24.8 in the month before their first illegal payment and 23.7 in the month after.
The study also pointed to elevated harm indicators among illegal-site users.
Britain’s Gambling Commission found that 45% of people it caught paying illegal gambling sites scored as problem gamblers, against 6% of licensed-site customers.
The regulator was careful to frame the limits of its own data, stating plainly that
the panel data is not nationally representative and cannot give a definitive picture of the illegal market, nor can it measure the market’s size or show that illegal sites cause the harm.
Methodologically,
a payment firm’s categoriser sorted the transactions, with any payment carrying a gambling probability above 50% counted as gambling, and only accounts that support open banking were included, so cryptocurrency payments are left out.
Why it matters
The findings cut against a simple industry narrative that higher taxes or tighter affordability checks drive players wholesale out of the regulated market and into unlicensed hands. Instead, the Commission’s own reading, as reported alongside the study, is that illegal gambling supplements rather than replaces licensed play for most repeat users identified. That complicates the argument that every pound lost to tax rises or friction becomes a pound diverted permanently to the black market.
At the same time, the data gives operators and the Betting and Gaming Council fresh ammunition on harm. The gap in problem gambling scores between licensed and unlicensed customers is stark, and it reinforces calls for stronger action against illegal sites rather than further restrictions on the regulated sector.
The report landed in Budget week, with the sector still absorbing earlier increases, including online gaming duty at 40% since April 2026, and the Betting and Gaming Council has linked those costs directly to the black market.
As one trade report put it,
the new data cuts both ways for that argument, and neither side can claim the report settles the question.
For affiliates and performance marketers, the study reinforces the commercial logic of steering traffic toward licensed brands rather than ceding search visibility to unlicensed alternatives. The Commission’s parallel research has already identified a specific risk here:
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.
That keyword pattern is a direct SEO and compliance concern for any affiliate network operating in the UK, since it signals demand that licensed partners cannot legally capture through conventional channels, leaving unlicensed operators to compete for that search intent instead.
The bigger picture
This is the latest instalment in a broader regulatory push to quantify a market that has long resisted precise measurement.
The regulator published the third phase of its research project into illegal gambling, finding among other things that using gambling websites that would not ask for much personal data was a key push factor, second only to customers searching for sites not covered by the GamStop self-exclusion scheme.
Separately,
the findings drew criticism from Betting and Gaming Council’s CEO Grainne Hurst, who accused the GC of pressing ahead with the implementation of financial risk assessments without addressing fundamental concerns identified during the Commission’s pilot study.
The debate sits alongside other recent tax and budget pressures covered on this site, including the rise in Machine Games Duty to 25% in the UK Budget, which has sharpened industry arguments over competitiveness against unlicensed operators. With the Commission continuing to publish incremental, caveated studies rather than a single definitive market-size figure, operators and affiliates should expect the black market argument to remain unresolved well into 2027, shaping both lobbying positions and compliance spend in the meantime.
Sources
- CasinoBeats – Gambling Commission payment data: 91% of repeat illegal-site users still bet with licensed sites
- Gambling.com – UKGC Study: Illegal Gambling Sits Alongside Licensed Play
- Yaspa – What the Gambling Commission’s open banking study shows about UK players
- iGaming Expert – GC data reveals complexities of black market engagement
- Next.io – UKGC study: illegal gambling supplements rather than replaces licensed activity
- SBC News – Commission finds high use of illegal site among UK problem gamblers
- Casino.org – Problem Gambling Seven Times More Common on Illegal Sites, UK Regulator Finds
- FairGambling Newsroom – UKGC Finds Problem Gambling in 45% of Illegal-Site Users
- Racing Post – Gambling Commission’s own research finds intrusive data checks are pushing punters towards the black market
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