The Betting and Gaming Council has put a stark figure on the scale of illegal gambling at last week’s Cheltenham Festival, estimating that up to £60 million was staked with unregulated operators during the four-day event.

Using recent market intelligence suggesting the illegal sector now accounts for approximately 6% of total wagering in Great Britain, the BGC calculated that around £2 million per race was flowing to criminal operators during the Festival. That’s significant when you consider the event typically generates close to £1 billion in total stakes across regulated channels.

BGC chief executive Grainne Hurst framed the estimate as evidence of a growing problem that threatens both consumer protection and the economic foundations of British racing. “Cheltenham is the biggest week of the year for racing fans and millions placed bets safely with regulated operators,” Hurst said. “But the criminal harmful black market also tried to cash in, targeting punters with illegal betting that offers none of the protections provided in the regulated sector.”

Regulatory pressures driving market leakage

The BGC’s intervention comes amid mounting industry concern that tightening regulation is inadvertently channelling customers towards unlicensed alternatives.

The trade body pointed specifically to affordability checks introduced following the 2023 white paper, which require operators to conduct financial assessments of customers exceeding certain loss thresholds. The Jockey Club warned in 2024 that these measures could cost the racing industry £250 million over five years as players migrate to black market operators that impose no such requirements. The checks can involve submission of payslips and bank statements. Recreational punters, unsurprisingly, view them as intrusive.

On top of that, there’s a substantial increase in gambling taxation. Remote gaming duty will rise from 21% to 40% next month, while remote sports betting duty is scheduled to climb from 15% to 25% in 2027. These tax hikes create a widening competitive advantage for illegal operators who face no such costs.

Market structure at inflection point

Hurst argued that the combined effect of these regulatory changes is fundamentally reshaping the market in ways policymakers may not have anticipated. “Rising taxes and increasingly intrusive checks will only make it harder for legitimate operators to compete,” she said. “The priority must be keeping punters in the regulated market where protections are in place, rather than driving them towards harmful unregulated operators.”

The BGC called for intensified enforcement action against criminal gambling operations, positioning this as essential both for consumer protection and for preserving revenue flows to British racing, which depends heavily on betting levy contributions and media rights income from licensed operators.

Worth knowing: the £60 million estimate is based on modelling rather than direct measurement. Still, it provides a concrete illustration of the market dynamics that have concerned regulated operators for the past year. As affordability requirements tighten further and tax burdens increase, the financial incentive structure increasingly favours operators willing to work outside the regulatory perimeter.

For racing specifically, the timing is particularly acute. The sport’s funding model relies on regulated betting turnover. Each pound diverted to the black market represents a double loss, both in immediate revenue and in the long-term sustainability of the industry’s economic foundation.

What the team thinks

Carl Mitchell says:

Philippa’s hit on something crucial here, but let’s be honest, when you’ve got punters facing stake limits and enhanced checks that can take days to clear, some are always going to drift to the easy option. I’ve been tracking this from the high street level for years and the real kicker is that these unlicensed sites offer none of the safer gambling tools or self-exclusion protections that brought in the regulations in the first place. The answer isn’t rolling back player safety, but the industry needs to work with regulators to make compliance feel less like punishment for legitimate customers who just want a flutter on the horses.