Illegal bookmakers are expected to pay up to £30,000 for private boxes at Cheltenham Festival this year. [Image: Shutterstock.com]

Cozying up to the money

Illegal bookmakers are expected to pay up to £30,000 ($38,372) for private boxes at this year’s Cheltenham horseracing festival in the hopes of generating lucrative business. However, this type of black market betting isn’t contributing anything to the horseracing industry, according to a report in the Mail Online.

more than £400m a year is put into horseracing by licensed bookmakers

As the report points out, more than £400m ($511m) a year is put into horseracing by licensed bookmakers through sponsorships, media rights, and the betting levy. Additionally, licensed bookmakers pay £4.5bn ($5.76bn) in taxes and employ over 120,000 people. Any profit generated through black market operators, though, is taken offshore.

On average, 65,000 people attend each day of the four-day Cheltenham Festival.

Affordability checks

Many have already raised concerns regarding the black market and the horseracing industry. And with the UK government set to introduce affordability checks on bettors, things are unlikely to improve.

Affordability checks will be conducted on players if their net loss hits £125 ($156) per month or £500 ($622) per year. More detailed affordability checks will take place at loss thresholds of £1,000 ($1,245) within 24 hours or £2,000 ($2,490) within 90 days. These amounts will be cut in half for those under age 25.

In September, the British Horseracing Authority (BHA) argued that the black market could have “significant financial implications” for the horseracing industry. Yet despite this, Andrew Rhodes, Chief Executive of the Gambling Commission, said that the size of the black industry in the UK was “very small, but estimates do vary.”

But with the government set to introduce new gambling measures designed to protect gamblers, reports suggest that more people could turn to the black market. Data from the Horseracing Bettors Forum highlighted that 73% of 296 respondents would consider using the black market if they were required to hand over more private information to bookmakers to continue betting.

Threat to the industry

As the Mail Online points out, the revenue generated from licensed bookmakers is important for the survival of horseracing.

found 231 illegal online operators and more than 1,000 middlemen targeting UK customers

The majority of illegal gambling has taken place Asia or the United States, but there is a growing problem in the UK. Online intelligence company Yield Sec found 231 illegal online operators and more than 1,000 middlemen targeting UK customers. It also discovered that illegal betting generated £270m ($345m) in the UK in 2023, making up four percent of the total market.

Yield Sec Chief Executive Ismail Vali said that black market operators are targeting English speakers because horseracing is an “easy product to deliver illegally.”

“Racing is highly visible, the data is freely available and nearly all races are televised or streamed,” he added. “You can run an illegal online operation from your bedroom using WhatsApp, and many people are doing so.”