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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
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Are you saying that Mark Zuckerberg and his tech team might be capable of developing a system that checks these ads before they go live within a few seconds? The black market problem is becoming one of the defining challenges for the regulated gambling industry. From rising tax pressure and tightening affordability rules to the growing role of social media and increasingly sophisticated payment workarounds, the dynamics are shifting and not necessarily in favor of licensed operators. At the recent Deal Me Out Black Market Prevention Summit 2026, some of the industry's sharpest minds came together to unpack what's really driving unlicensed growth and more importantly, what's not being done about it. Welcome to iGaming Daily where we will try to answer a very important question. Is enough being done from a regulatory perspective or is the current framework actually pushing players towards the black market? Welcome again to another episode of iGaming Daily. Like we said, brought to you by Optimu, the creator of positionless marketing and number one player engagement solution for iGaming and sports betting operators. I am Fernando Nott, media manager for SVC and your host for today's episode, uh this time with a video. Of course, you already know our pretty faces from the social media snippets, but this time we are doing the full episode on camera together with Martin Elliott, director of media. Hi Martin, how are you today? Yeah, very well. Thanks Fernando. Looking forward to discussing one of the industry's big issues with you and my esteemed colleague. Joe Streeter, over there. Joe Streeter, editor for iGaming Expert. How are you today? Yeah, I'm good. Thanks, Fernando. Yeah, I was at the Deal Me Out conference yesterday. And yeah, a really interesting conference. So excited to kind of get into some points and look ahead. You know, we're in a pivotal time for the industry. yeah, great to be here. All right. So of course, the black market is probably on every single episode we talk or we do. every conversation at some point has some discussion around the black market. And this event in particular was specifically focused on the issues and challenges that the black market brings to the iGaming industry. So Joe, what are your main takeaways from the event? So, to let the audience behind the fourth wall, I did see this question before we came to air. um And I've been going back and forth in my own head about my main takeaways because there were so many, so many interesting perspectives, all kind of nuanced on this subject. So I'm going to try and give you a uh few. I'm going to try and Spitfire a few at you if that's okay for. One is that the room was a little bit split um and you don't always see that at these types of conferences. They're very much aligned in the aim that is trying to be, is trying to be met. The goal is the same of this room is, you know, to try and uh halt the black market and to best get there. But the room is a little bit split at the moment and that isn't necessarily around the black market, but that was around OHID um and the new funding for the third sector and for funding safer gambling in the UK. Yeah, it was quite interesting to hear that and to be part of that. um some really interesting discussions about the future for safer gambling treatment in the UK. So yeah, that's one. Another one closer to the black market is around black market, market share, if you like. I think, you know, we see the black market and what we see is as people, you know, like Martin and I have grown up in UK betting, if you like. uh We know the brands. We know what we expect from a UK betting brand. know Ladbrokes, William Hill. We know these brands. They when we think of British betting, these are what we think of. when we think of gambling companies, these are what we think of. There's a new generation uh that are so, yes, it's to go back. um You know, when we think of who the black market is trying to attract, it's largely the most vulnerable players. But I think that's expanding now. um And I think the black market is trying to attract a new generation whose first first ever kind of exposure to gambling their first foray into gambling, whether it's seeing brands or whatever, will be influencers playing crash games or playing games online. So what they know as gambling is unlicensed operators. And that's a really dangerous precedent that's kind of changing the landscape of gambling. I found that absolutely fascinating and it creates a whole new problem. ah And as we deal with education, you know, that's obviously a key factor is kind of educating players around the black market, around what is the black market, the dangers of the black market. You're having to kind of nuance that education to the most vulnerable and also to those who are, you know, adolescents that... are just going to start their gambling journey, if you like. They're just going to first initiate their experience with gambling. And it's going to be with an unlicensed operator. That's a really dangerous game. And it means that two different approaches need to be taken to educating those punters, if you like, because ah it's different. They engage with gambling in a different way. yeah, but there was lots to there was really lots to take home. from yesterday's event. All right. So hopefully I don't remember exactly how you phrase it, but you grew with betting. Hopefully that doesn't mean that you were betting as a child and neither did Martin, I hope. being so experienced in the betting industry, in the gambling industry in the UK, and of course, Joe, taking also what you heard or the conversations you had at the event this week. What, how serious is the black market threat in the UK right now compared to the previous years? course, Martin, uh, jumping as well, even though you were in a deviant, but you have experience in the UK ready market for sure. So yeah, betting is a part of British culture and you kind of understand British culture as you're growing up, especially as a, as a sports fan. Uh, yeah. When you are growing up. Um, but how big is the problem? I think, I think it's really quite severe. Um, And I think it's only getting more and more challenging as regulations around the regulated market increase. The regulated market is going to have more and more challenges in reaching the audience. um And the black market is kind of allowed to run wild on social medias and the channels that really engage uh a more vulnerable audience. It's really allowed to... Yeah, be as aggressive as it wants on those. And that's where the challenge comes in. Yeah, I think we're not Sweden. We're not Germany, where it makes up maybe a third of the market, something like that. it's realistic. So in the UK, it might be somewhere between eight and 10 percent of the market is now the black market. And that is a growing problem because channelization has been one of the great success stories of the of the regulated market in the UK. And there's a bit of a theory around that the black market is made up of two groups. One is people who've self-excluded via GamStop, which is the UK's national self-exclusion scheme. And we really need to say that this is the reason, this is the most serious thing. have to, the most serious reason rather. why we have to take action on the black market to protect those players. The second group that is always quoted is the high rollers, because it can be quite difficult to get a substantial bet on. Now, you want to bet, if you're somebody who wants to bet £20,000 on a horse race or £50,000, something like that, um I don't think either Joe or I actually fit into the group of people who have that kind of bankroll available. And the reason for that is it's It's just there's less friction to get that kind of better on in the black market. But I'm not entirely convinced that that is the entirety of the black market audience from the UK. I think there's a growing number of people like Joe has just been talking about, younger players who've learnt about gambling from social media and in particular the quite aggressive marketing from em no KYC crypto casinos that you see on social media. In particular, Crash games are a huge hit with that kind of audience as well. So I think there's those people and there's also, as we get more into this internet age and everything is monitored and everything is traceable, there's a growing section of society and this isn't just about betting who don't want to be tracked. They don't want everything they do. being visible by the government. So they don't want to go through KYC checks. They don't want to go through financial risk checks and so on. And the black market does offer that person with that slightly paranoid mindset, m seemingly, you know, the veneer of an escape route from that as well. there are all sorts of reasons why people are going to black market operators. And we need to look at that because having on several occasions written features about the black market and as part of research, signed up with some of these operators just to see how easy the process is. I have made the mistake on several occasions of using my actual contact details in that sign up process and they are really aggressive in their personalised marketing to you. The only things they really want from you information wise is your mobile phone number and your credit card details. And they will try to persuade you to empty, to use every bit of your credit limit on that credit card and really squeeze you dry. So people need protection from that. People who are naive enough to think that there's no ill effects of going to these black market operators rather than going to a regulated operator, they need protecting. of course they need protecting from someone. I mean, protecting, that someone protects them, that's what I mean. So our policy makers actually underestimating the scale of the problem in the UK. Um. I think they understand it. However, the industry and I include us in the specialist B2B media as well as part of this, we're not very good at explaining what the problem is. um The average man in the street doesn't really understand what you're talking about when you talk about black market gambling operators and so on. And because of that, it just sounds a bit like a scare story and it's, don't tax us anymore because there's this bogey man off there who you can't quite see and you don't understand and you have no experience of. However, as an industry and I include in the industry B2B media, so us, the people around this, you know, having this discussion here, we've not been very good explaining exactly what the problem is and why it's a problem. When you talk about the black market, the man in the street does not. really understand what you're talking about. It sounds like a scare story. It's a being, please don't tax us. Please don't tax us as a bogeyman. You don't know what it is and you can't see it. But please, please us, give us favorable treatment. And that's what it sounds like to the public. So while the lawmakers do understand that this is a problem and that they are missing out on something, they don't see any votes in it. So there's no real need for them to do anything about it. And the reality is it is difficult for the government to do anything about it. And as soon as they actually pitch in and say, yes, this is a priority for us, we're going to do something, it's actually quite measurable, the effect that would have. Governments don't like policies that are measurable, because when they fail, it's very, very obvious to the public. There's no doubt the government would like to recline the extra tax revenue that they're losing to the black market. And they would like more jobs to be onshore in the UK than people targeting on market from overseas and are seeing no benefit as a country from it. But I just think they think it's difficult and they think the public isn't bothered. Yeah, I'm honestly not sure Martin if they if they do understand the severity of the threat and if they do understand the black market, I mean the the 26 million pound figure that was given to the industry to fight the black market would indicate that they probably don't understand how big this this threat is and how to tackle it. And also, I would say that the I mean, it's a emotion that's been put forward around banning unlicensed sponsorships in English sport um is one that's a strong kind of gesture, if you like. But I think that speaks to not understanding how the black market does engage its audience, which we know is through social media, through social streams. um Yeah, the kick and the Instagrams of the world. This is how they engage their audience. If they're kind of going to cut them off, if they're going to they're going to have to do it through this source. the non non-gamstop casino website adverts on Instagram. They're horrific. They're immoral. That's where you have to kind of target them. That's where you have to kind of uh try and thwart the black market. So, yeah, I'm not sure they do understand quite the severity of the threat. The other way that you kind of tackle them is PSPs. If you can get to the PSPs, if you can get to the payment service providers, that that would be massive too. Of course, there's more to discuss about the black market, especially around advertising and PSPs. So we're going to take a very quick break here and we'll be right back to discuss more about it on iGaming Daily. And we're back with more iGaming Daily to continue discussing the black market issue in the UK, which is of course very serious at this point. The gaming industry has been growing and growing and growing and with that some... unlawful operators that don't abide by the rules have definitely gained some market share over the last few years. And Martin, you, over in the first half, you mentioned taxation, like the related operators talking about taxation, which at some points may sound a bit of an excuse, like the black market, that's an excuse to avoid being taxed. But it is a recurring topic when discussing the industry, especially over the last few months. So how big of a factor is high fiscal pressure on the regulator operators to increase the market share for the unlicensed ones? Well, we're about to find out because we're about to go with a significant tax increase in the UK for online casino, which I think is going to be GGR to tax on GGR of 40 percent, I think, which is a phenomenal rise from where we were previously. I think what we're likely to see as a result of that is reduced choice in uh the regulated market because there are small operators now just looking and going, we can't make a profit. So it's not worth it. We're going to leave the UK. And we'll also see the bigger operators looking at where they can save a few quid here and there to pay the... pay those tax bills. So it might mean reduced return to player rates on slots. It might mean worse odds on sports betting. all of that gives the offshore guys an advantage. It just makes their product look more attractive. We're already having um smaller margins because they're not paying tax. um And I think all that does is, there are other factors that come in about the rates of bonus you can offer in the offshore casinos and so on as well. But all of that comes down to money and tax is uh a big, big thing for uh us in the industry. I think the government has made a huge mistake, in changing, uh not in changing the tax rates completely. reality as the UK economy is. em I'm choosing my words carefully now because I don't want our editor to have to edit out some swear words at this point. But the UK economy is not in great shape and it is fair to ask the betting industry to pay a bit more because everyone else is paying a bit more in tax to support that. But the size of the tax rise is ludicrous and that is going to be damaging for people who care about... players being able to play safely and not being exposed to the worst parts of the industry who are the offshore operators. Yeah, I think I'll echo that and I think we have to kind of look at why players go to the black market in many cases. And, you know, when we talk about horse racing or even iGaming really, it's because the options they're allowed to offer are just far wider than the regulated market. The regulated market is so hindered by frameworks and things like that. The unregulated market doesn't operate uh under any type of rule set at all. With these tax changes, I fear that we're potentially giving another reason for players to go to the black market, providing another avenue when prices eventually... uh come down and a price is tightening the regulated market. uh It's going to be so hard to make a profit. The UK market is virtually uh unprofitable for regulated operators and you are going to kind of end up driving players to the black market. mean, with bonus buys and with turbo spins, you're kind of creating a USP for the black market. And if you ask me now whether I would... uh bring them back to the regulated market? The answer is probably no, but we have to be careful that we're not creating too many avenues for uh people to go to the black market, too much of a competitive advantage for the black market. We have to give the regulated market a chance to compete. It's wholly bizarre when you think about it. The job of the gambling commission in doing the work of the government is to uh manage the regulated market and some of the changes they've made and their well-intentioned changes around products and the way slots work, that kind of thing, the unintended consequence has been to make the black market operators look a bit more attractive. I don't have the answer to that, but I just think it's a really strange situation that we've got ourselves into. And also during the first half of the episode, Joe brought up uh two very important sides of the issue. And I wanted to address the first one first, um which is advertising. Of course, players are exposed to m these black market operators through advertising and especially social media. Is enough being done on that specific front? Joe, you kind of sort of address this already, but if you want to elaborate a little more on that. Yeah, absolutely not. There's more to be done. There's far more that could be done in terms of the role of social media platforms. I think these are the big engagement tool, the big exposure tool for unlicensed operators. And we're not even talking just about kind of kick streams and stuff like that. They do play a role, of course, but we're talking about the mainstream social media platforms, ah Instagram, Facebook, these platforms have a big role in providing an audience and providing advertising from the unlicensed operators to just a wide audience that simply isn't targeted at all. And that's a really dangerous game we play because um from there, that, as I said, at the top, that's kind of people's first experience in gambling. The first time they're exposed to a gambling company is through Tick, not TikTok streams is for streams that they're viewing on various social media platforms. So it's, yeah, it's something that more could be done as well. And sometimes I think about when we kind of, when we talk about enforcement on the black market. um Sometimes it's really difficult. We've seen fines issued and stuff like that. They're almost unenforceable because how can the UK government issue a fine or the UK GC issue a fine to a company that is based in, we don't even know where and they've got bases here. It's impossible to sanction unlicensed operators like that. It's not impossible to take these adverts and to remove these types of things from social media. This is, uh yeah. actionable stuff that I think could have an actual impact. you saying that Mark Zuckerberg and his tech team might be uh might be capable of developing a system that uh checks these ads before they go live within a few seconds? It feels doable, right? Yeah, I mean, they can do all sorts of other things. uh Wasn't he going to build a metaverse and make it the greatest thing ever a few years ago? And now he's all in on AI. sounds like he's into advanced technology and he could do something about it if he wanted to. To be more serious about it though, those of us who work both in the online media and particularly around who've worked previously in newspapers and ads and so on, the regulations about the ads you can accept there, the content you can put in there are quite strict. The fact that Facebook whatever Twitter is called these days and so on, that they do not have the same regulations. They are not counted as publishers. I still find that utterly bizarre. And their ghetto of JL card is always, well, you know, the ads are self-service and we don't see them all before they go on and all this kind of thing. I think that's a nonsense. Just if you go to them and say, uh if the government wants to go to them and say, see what we're going to do, you can either sort out this problem. or we will regulate you as a publisher and you will be responsible for not just the advertising, you will be responsible for um if somebody is defaming somebody else on your platform and so on. And we can get that through Parliament in say a month's time if you like. They would sort out this problem easily enough. I think we've seen you can threaten, Big Tech has a lot of flexibility, it can outmaneuver governments in a lot of ways. ways, but things like that, you can threaten them. Yeah, we saw that with Grok, right? We saw that with Grok, the political pressure mounted and eventually action was taken on all these images being generated on Grok. it does have an impact. There is pressure that can be put on big tech and on social media platforms. And of course, there's plenty more issues to discuss around the black market. We didn't even discuss payment service providers or even how accountable should providers be in this whole matter. But of course, since we don't want producer NA and McDonald to kill us for going way over our time cap, we'll have to leave that for a part two episode on the black market. So if you want to hear more about this, make sure you engage with this video, share it, comment, uh insult us for having such uh different opinions than yours. Anything is welcomed. We'll surely be discussing this more in the future, probably in the near future. But for today, that's been all. Thank you very much, Joe, Martin, and of course, thank you very much, Annie McDonald for producing this episode and being so patient with us. I'm Fernando Nott. And to our listeners out there, we'll see you in the next one. Goodbye.