A report by GAMRS, powered by DealMeOut, has looked to lay bare the significant extent of the global gambling black market, revealing that the wider Santeda-linked network generates approximately £3.5bn annually.
Part one of the 55-page report by GAMRS pinpointed Santeda as the central operator that enables the full ecosystem to continue operating through a hydra model.
What fuels the hydra model is the use of multiple domains and mirror sites, shared infrastructure, redirect systems, and a significant affiliate network.
Affiliate marketing was underpinned as a critical growth engine for the network, specifically highlighting the role of streamers and influencers as being particularly pertinent to the growth of affiliate traffic for black market casinos.
This has been a consistent warning from many over the shifting digital habits of a younger generation and how they are being infiltrated by streamers that are promoting unlicensed operators in an aggressive way.
What should also be of stark concern for regulators and policymakers is that the report detailed that, for unlicensed operators, the UK is a key target market for engagement.
For Velobet, one of the key operators within the network, 75.9% of traffic originated from the UK market, with a chunk of this coming from users who had engaged with GamStop.
Furthermore, the trajectory of the UK traffic should also be of major concern to policymakers, with the report revealing major growth of illegal gambling in the UK, rising from 0.5% of gambling activity in 2020 to 12–15% by 2025.
This was underpinned by a warning that the trajectory is unlikely to be reversed at any point in the near future as a result of taxation changes and regulatory challenges in the UK market, which have made it increasingly difficult for the licensed market to challenge.
UK enforcement is missing the mark, according to the report, focusing on individual websites and URLs as opposed to the wider affiliate and acquisition network that is aggressively aiming at attracting new audiences through search and streamer engagement.
The report raises concerns that revenue generated from UK consumers through allegedly unlicensed offshore gambling operations may be recycled through a network of connected companies and investments, including construction and real-estate projects in the CIS region, allowing profits derived from vulnerable UK gamblers to be deployed into other commercial sectors.
Whilst affordability checks are not cited in the report, the allure of operators not being in the framework was key to the attraction of players to unlicensed operators.
This comes off the back of the damning revelation from Bally’s Intralot Chief Executive Officer, Robeson Reeves, who warned that high-value players are long gone from the regulated market as he laid out the roadmap for the operator’s success in the UK.
Any future regulatory shifts should be done with a level of care and caution, as the UK is desperately in need of shifting the momentum away from black market operators.
Payment blocking is often cited as a key method towards thwarting the threat of the black market, but the report underpinned that the black market chain is resilient to many disruptions and has the ability to evolve.
That being said, should the affiliate network be crippled, exposure and engagement could likely be slowed, but this would provide alignment in strategy between the government, PSPs, regulators, and perhaps the biggest challenge, engaging social media platforms.
UK government has shown it is not averse to taking a heavy-handed approach to regulating social media platforms, putting forward a ban for under-16s using social media, a legislation that, in its current form, risks leaving gaps for streaming platforms to be engaged with by a younger audience.
At the heart of the issue is also the blatant advertising of non-GamStop casinos on social media platforms, with the report warning that operators are specifically targeting and benefiting from the attraction of players who have utilised self-exclusion tools.
