Organised crime gangs are exploiting as many as 2.5 million vulnerable individuals across Britain and Eastern Europe, enlisting them as "money mules" to bankroll illegal gambling operations, according to a new report commissioned by the Betting and Gaming Council.
The research, produced by advisory firm Fincord Intelligence, found that pensioners and students were among those being drawn into laundering schemes, surrendering access to their bank accounts so that criminal networks could process illicit payments and conceal the origins of funds.
Some of those recruited end up trapped in financial dependency on the very gangs exploiting them, the report warned.
Industry leaders have pointed the finger at Labour's escalating tax burden and tightening regulatory regime for licensed operators, arguing that these measures are driving customers towards an unregulated black market and leaving vulnerable people exposed to exploitation by criminal enterprises.
The Fincord report revealed that gangs obscure their financial trails through a technique called "miscoding," in which gambling-related payments are labelled with innocuous terms such as "education" or "flowers" to make them resemble ordinary personal transactions.
Criminal operators maintain access to thousands of separate bank accounts for receiving and transferring deposits, ensuring that the money flows appear to be routine individual transfers rather than betting activity.
Those drawn into these networks frequently become "part of the payment infrastructure of organised crime, often without realising the consequences," the report stated.
Britain's stringent gambling regulations have inadvertently created space for the black market to flourish, according to the findings
Unlicensed platforms are actively courting bettors who wish to circumvent the rules imposed on the legitimate sector, with some affiliate websites explicitly marketing their services to individuals registered with the self-exclusion programme GamStop.
The BGC has been sharply critical of the government's approach, warning that the regulatory and fiscal environment is handing an advantage to unlicensed operators at the expense of the legal industry.
A spokesman for the trade body said: "If the Government continues to tilt the playing field in favour of illegal operators through higher taxes and tighter regulation, it will push even more customers towards a market that pays no tax, ignores every rule and offers none of the protections of the regulated sector."
The Fincord report reinforced this argument, concluding that unlicensed gambling platforms effectively reward punters for abandoning the regulated market. "In essence, the illegal sector compensates players for the restrictions imposed by the regulator," it stated.
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Licensed bookmakers have faced a succession of new obligations and rising tax demands under Labour, with industry figures warning that the cumulative effect is undermining the viability of legitimate operators while emboldening criminal enterprises.
Rachel Reeves, in her final Budget as chancellor, levied substantial tax increases on remote and online gambling firms.
The Gambling Commission followed in July with plans to mandate financial risk assessments for online punters losing significant sums, including anyone staking more than £1,000 in a single day.
Evoke, William Hill's parent company, agreed to a £243m takeover in July after warning that the heavier tax burden would add up to £135m annually to its costs, necessitating sweeping cuts across the business.
A Government spokesman said: “The gambling sector is supported by a stable economy and it must contribute to public services.
“Gambling duty reforms will raise around £1bn a year to help fund the Government’s priorities, including support with the cost of living. We are also providing millions in additional funding to the Gambling Commission to strengthen enforcement and tackle illegal gambling.”
A Gambling Commission spokesman said: “Illegal activity linked to gambling is a threat that we take seriously, and we work closely with partners to identify and disrupt those seeking to operate outside the regulatory framework.
“We’re stepping up action to protect British consumers from illegal online gambling through one of the largest anti-illegal market operations anywhere in the world.”
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