UK Gambling Commission: open-banking data shows illegal play supplements licensed activity

The UK Gambling Commission published a study on 28 October showing illegal online gambling in Britain often supplements rather than replaces licensed play. The Commission analysed anonymised open banking data from 38,000 consenting YouGov panel members covering July 2018 to July 2026 and found that 91% of the 122 people with at least two detected illegal payments also gambled with licensed operators.

How the Commission traced payments

The dataset contained 157.2 million transactions. Of those, 4.8 million were identified as payments to licensed non-lottery operators using a gambling identification algorithm provided by Yaspa. The regulator found it harder to flag payments to suspected illegal operators because fuzzy-matching of known illegal brand names against transaction descriptions returned nothing, which the Commission said may indicate illegal operators rarely give their names to payment providers.

Matching bank statement descriptions with merchant names linked to suspected operators eventually surfaced 3,426 transactions from 179 people, whose average age was 44. Among those 179 people, Postdoctoral Data Scientist Steven Murphy wrote in an accompanying blog that the pattern of activity challenged the idea that illegal play is a direct substitute for legal gambling.

Overlap between illegal and licensed play

The study examined 122 people who each had at least two detected illegal payments. 91% of that group also used licensed operators, and their licensed activity did not fall substantially after the first detected illegal payment. Six months before a first illegal transaction the group averaged 28.8 licensed transactions per person per month; six months after the first illegal transaction the figure was 23.6. Illegal transactions for the group peaked at 4.9 in the first month after detection, then settled between 1.2 and 1.9 per month. The Commission noted illegal payments often arrived in clusters and were frequently close in time to licensed bets.

PGSI (Problem Gambling Severity Index) scores were available for 146 of the 179 people. Of those, 45% scored eight or more, the threshold for problem gambling. By contrast, among 12,543 licensed non-lottery gamblers in the dataset 6% scored eight or more. A further 17% of the illegal-user sample scored three to seven, compared with 9% of the licensed sample. Only 26% of illegal users scored zero on the PGSI, against 68% in the licensed group. The regulator cautioned the YouGov panel is not nationally representative and said these figures describe the study sample only.

Credit cards, banned for licensed gambling since April 2020, accounted for 4% of illegal transactions observed in the dataset.

Tax changes and industry response

The report arrived the same day Chancellor John Healey delivered his first Budget. The Autumn and Spring tax changes cited by operators were: Remote Gaming Duty rising from 21% to 40% in April 2026, a new 25% remote betting rate due in April 2027 with UK horseracing excluded, and Machine Games Duty rising from 20% to 25% on higher-stakes machines effective April 2027.

Operators have linked those increases to growth in unlicensed activity. Flutter, which has proposed up to 1,400 redundancies in the UK and Ireland, said through UK and Ireland CEO Kevin Harrington that the duty rises were helping to fuel the unlicensed market. Entain estimated the machines rise would cost £25m a year before mitigation. Entain CEO Stella David said:

"The previous gambling tax increases announced in November last year have already had detrimental consequences across the industry, with the effects being felt by employees, communities as well as customers. These additional tax changes will further compound that damage and push more people into the growing illegal market." — Stella David, CEO of Entain

The Gambling Commission said its findings complicate the narrative that tax rises are the direct driver of illegal play. The dataset runs to July 2026, four months into the 40% Remote Gaming Duty rate, and the regulator emphasised the study cannot be used to estimate the size of the illegal market.

Limits of the study and next steps

The Commission said the study design cannot establish causation between spending with illegal operators and gambling harm. The dataset covers only fiat payments from banks that support open banking, so deposits made in cryptocurrency are not included. The regulator described the work as a proof of concept and said it wants to expand use of financial transaction data in collaboration with banks and payment providers.

For licensed operators, the date to watch is April 2027, when both higher betting and machine duties take effect in the same month. The Commission noted repeating this exercise on data covering that period would provide a direct read on whether customers maintain licensed activity once the full tax load is in place.

For further reporting on regulatory responses see the regulation section and for operator reactions see our b2b coverage on industry cost impacts. The study itself and accompanying Commission commentary were published on 28 October 2026.