A Flutter-commissioned investigation has laid bare the deceptive tactics of the black market, as the lines become increasingly blurred between the regulated industry and unlicensed operators.
Speaking to SBC News, former fraudster turned investigator and government advisor, Alex Wood, who conducted the investigation, emphasised that ‘the biggest problem is being able to identify a dodgy site from a legit one’, as players fall into the trap of being lured onto the black market.
Wood used several strategies to reveal the underhand tactics – false responsible gambling information, marketing manipulation, withdrawal issues and failure to verify customer details – of illegal operators.
During his investigation, he warned that social media providers are enabling the promotion of black market operators on a widespread level, singling out Meta for criticism.
He told SBC News: “I was at a police event and it was said that Meta makes more money from crime than any criminal outfit in the world, whether that’s romance fraudsters, illegal betting, dodgy crypto investments.
“They’re making more money by charging for people to show this content than any of the influencers put together. Whilst they’re making all that money, there’s nothing you can do.
“There were people from the Home Office at this event saying: ‘We’ll sue Meta’, but they’ll just appeal, and they’ll keep appealing, and we’ll run out of money.”
Significantly, he also revealed that they are hosting the end-to-end betting journey from onboarding to deposit to loss within native applications such as Instagram on iOS.”
He stated his concern that by enabling this process, the social media platforms are lending ‘a veneer of trustworthiness and legitimacy’ to ‘deeply harmful’ black market sites.
Wood revealed that during his investigation, he could see examples of where the whole transaction occurs within Instagram, with no diversion to a third-party site.
“Their name is visible all the way through it, so they’ve got visibility of what these transactions are, and they are charging a commission on all of those deposits.”
Wood noted that the verified account feature on platforms such as Instagram can be seen to be giving ‘a clean bill of health’ to operators and thus offering ‘tacit endorsement’, which should not be the case since the content they post ‘glamourises illegal and unlicensed operators’ who shouldn’t be accepting UK players.
He also highlighted the presence of young male influencers, some associated with the manosphere, driving their followers to black market operators, often through harmful social media content.
Previously speaking to iGaming Expert, BetBlocker Chief Executive Officer, Duncan Garvie, expressed concern over ‘a huge problem in advertising regulation in the UK’ when it comes to streamers and influencers.
Garvie stated: “Licensed gambling operators would come under intense scrutiny for engaging with marketing channels that appeal to younger audiences. But these rules are built into the UKGC gambling licensing conditions.
“As influencers are not required to be licensed, and as these unlicensed brands are unrestricted by UKGC edicts, it leaves these stakeholders free to partner up in a way that completely undermines any marketing protections that the licensing system is intended to deliver.”
He added: “This is compounded by the fact that influencers are driving younger consumers through to unlicensed gambling operators. We are losing our young population to the black market, and once they’re gone, it’s unlikely they’re going to come back.
“More needs to be done to require the streaming platforms to ensure that their content creators are marketing products that are legally fit for the markets they’re reaching.”
Speaking at the Illegal Gambling Prevention Summit, Woods warned that blocking domains doesn’t go far enough and is merely ‘squeezing the balloon’, noting that the most effective route to thwarting the black market is through halting the ability of payment service providers to take money out of the UK.
The surging threat comes amidst an increasingly tough environment for the regulated market, as the door opens further for unlicensed operators to increase exposure and attain a more significant market share. Commenting on increasing taxation rates and a tougher regulatory environment, Wood issued a stark warning to regulators that ‘if you wanted to guarantee the success of the black market, you’re doing everything right’.
