UK Gambling Commission Finds 45% of Illegal Gambling Users Screened High Risk

LONDON – New UK Gambling Commission research found that illegal gambling often occurs alongside activity with licensed operators. The findings challenge assumptions that unlicensed sites directly replace regulated gambling while identifying elevated gambling-harm risks among their users.

The study identified 3,426 suspected illegal gambling transactions involving 179 individuals. Among people with repeated detected illegal transactions, 91% also used licensed operators, with researchers finding no substantial decline in regulated gambling activity after their first identified illegal payment.

Illegal Gambling Often Supplements Licensed Activity

The UK Gambling Commission study used anonymized Open Banking records from approximately 38,000 individuals, covering July 2018 to July 2026. The dataset contained 157.2 million transactions, including 4.8 million involving licensed non-lottery gambling operators.

Researchers identified suspected illegal gambling payments by matching transaction descriptions and merchant names against previously known records. The resulting 3,426 transactions involved 179 individuals, with 122 making at least two detected payments to unlicensed operators.

Among these repeat users, 91% also transacted with licensed gambling businesses. Average monthly transactions with regulated operators remained relatively stable before and after the first detected illegal payment, suggesting that unlicensed gambling was occurring alongside existing betting activity rather than replacing it.

The regulator also found that illegal gambling transactions frequently occurred in clusters, with multiple payments made over short periods. Transactions with licensed and unlicensed businesses often appeared close together, suggesting that consumers moved between both markets.

Nearly Half of Identified Users Screened at High Risk

The research also highlighted a substantial difference in gambling-related harm indicators. Of the 179 individuals with detected illegal gambling transactions, 146 had available Problem Gambling Severity Index (PGSI) scores, allowing researchers to compare their reported gambling problems with those of other consumers.

Among those 146 individuals, 45% scored eight or higher on the PGSI, indicating problem gambling. The equivalent figure was 6% among 12,543 people with licensed non-lottery gambling transactions in the same dataset.

The findings suggest that people using unlicensed gambling sites may face greater gambling-related risks. However, the analysis does not establish whether illegal gambling contributed to those problems or whether individuals already experiencing difficulties were more likely to use unlicensed operators.

The study also identified 138 suspected illegal gambling transactions involving credit card accounts, representing 4% of detected payments. The remaining 3,288 transactions were associated with current accounts, demonstrating the range of payment methods captured in the analysis.

UKGC Highlights Research Limits and Further Investigations

The Commission emphasized that the dataset is not nationally representative and cannot establish the overall size of Britain’s illegal gambling market. Researchers also acknowledged that some unlicensed transactions may have gone undetected, particularly payments involving cryptocurrencies or financial institutions outside the Open Banking dataset.

Steven Murphy, a postdoctoral data scientist at the Commission, said the research demonstrated the value of examining actual financial transactions rather than relying entirely on surveys or website traffic estimates. The findings add another source of evidence to the regulator’s efforts to understand consumer behavior in the illegal market.

The research follows wider concerns about unlicensed operators reaching British consumers. In June, the Betting and Gaming Council called for stronger action against illegal gambling promotion online, particularly advertising that targets vulnerable consumers and people who have self-excluded from regulated gambling.

The Gambling Commission plans to expand its use of financial transaction data and explore further cooperation with banks, payment providers and other organizations. The research introduces no new regulatory requirements, but its findings could help inform future investigations into illegal gambling activity and associated consumer harm.

RELATED TOPICS: Responsible Gambling