IFHA expresses concern over explosive growth in unlicensed betting

IMAGO

The International Federation of Horseracing Authorities (IFHA) has voiced concerns about a substantial increase in black market online betting. The group’s initial report stated that traffic to 22 popular unlicensed online betting platforms had risen 522% between August 2021 and September 2024. 

During the same period, traffic to 10 fully regulated sites had risen by just 49%. The group has pointed to the increase in registration detail requirements for bettors as a primary reason and warned that further stipulations will make matters worse. 

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The IFHA studied traffic to 22 unlicensed betting sites that accept bets on UK horse racing. Between January and September 2024, traffic to these sites equated to more than 600,000 unique visits per month, or 1.3 million total visits. The top 10 UK-licensed sites saw growth of 25% in total visits and 49% in unique visits. 

The illegal betting market is still only a fraction of the size of the total UK betting market, but its growth in visitors is outstripping that of regulated sites. The IFHA has attributed some of the disparity to increased affordability checks. 

The UK Gambling Commission (UKGC) rolled out new, stricter rules in August 2024. The new rules meant that punters whose monthly deposits totalled more than £500 per month, net, would have to undergo an affordability check. The checks are conducted by using credit reference agencies to calculate the individual’s capability to afford the deposits. 

Some bettors may not want to fail the checks, while others are likely cautious about having such checks registered with credit referencing agencies. The UKGC has stated that the checks are soft checks that do not impact credit ratings and data would not be shared with the financial sector. 

Although the report does not directly pinpoint the changes to the increased unlicensed site activity, BHA acting chief executive Brant Dunshea said: “British racing has repeatedly warned of the unintended consequences of well-meaning policy decisions on our sport, including the threat of inadvertently growing illegal market activity.”

Similar patterns have been observed in other jurisdictions where affordability requirements have been enhanced. If that is the cause, the situation is likely to get worse, as the UKGC plans to reduce the monthly deposit limit to £150 a month. Many more bettors will have to undergo background checks to ensure affordability. 

Dunshea went on to say that the group had noted “increased enforcement action in recent months by the Commission” but that they would be “sharing these findings with the Government and hope it will work with us to encourage bettors to stay in the legal market.”

The UKGC recently published a report showing online horse racing betting turnover had fallen from £10bn in 2022 to £8.37bn in 2024. Taking inflation into account, that represents a 25% decline in betting revenue for the sport. 

That decline has also coincided with a fall in funding from media rights and other vital funding. At the time of the report, MP Nick Timothy said: “These statistics show exactly why so many are worrying about the effects of disproportionate affordability checks on horse racing.”