Children and self-excluded gamblers increasingly targeted by illegal betting operators
In a worrying new report submitted to the UK Parliament, tech intelligence platform Yield Sec has revealed that illegal online gambling activity in the UK has surged fourfold between 2021 and 2022. Behind this spike lies a shadow industry preying on vulnerable users, including children and individuals who have self-excluded from gambling through legal means.
Founded by Ismail Vali, Yield Sec specializes in tracking and combating illegal gambling online using advanced AI and surveillance tools. In their latest findings, shared with the DCMS Committee, the platform uncovers how unlicensed betting operators are increasingly exploiting regulatory gaps, sophisticated advertising tactics, and even social exclusion mechanisms to grow their user base, often at the cost of society’s most at-risk groups.
A Marketplace Divided: Legal vs. Illegal
The core message from Yield Sec’s submission is that the UK gambling industry is not just one marketplace, but two parallel ecosystems. One is the legal, licensed industry operating under government regulation. The other is a fast-growing black market – lawless, tax-evading, and designed to bypass safety nets.
According to Yield Sec, illegal operators aren’t just thriving – they’re actively targeting vulnerable users. These include:
- Children, drawn in via so-called “loot crate” or “mystery box” mechanisms, which mimic gambling under the guise of video game content.
- GamStop-registered adults, individuals who have voluntarily self-excluded from gambling. These users, blocked from legal platforms, are often funneled toward illegal sites offering unregulated access — and in many cases, tailor-made welcome bonuses.
“Vulnerability Vacuums” Fuel Criminal Gains
This phenomenon, which Yield Sec terms vulnerability vacuums, is becoming a key driver of illegal gambling revenue. Because these users are already known to have gambling problems or high spend histories, they are considered “qualified leads” by illegal operators — and are cheaper to acquire than new customers.
The issue is made worse by aggressive online advertising, SEO manipulation, and offshore hosting — making enforcement extremely difficult without modern surveillance tools.
The Global Cost of Illegal Gambling
This isn’t just a UK problem. Globally, the United Nations estimates that illegal sports betting alone generates up to $1.7 trillion annually, roughly $340 billion in profit for criminal groups. In contrast, the entire legal gambling industry yields only about $40 billion in profits.
“This is commercial insurgency,” says Vali, describing the illegal market as a threat on par with organized crime and terrorism in its structure and tactics. In fact, Yield Sec’s platform was originally built on technology used for anti-terrorism intelligence.
What Needs to Change?
Yield Sec urges UK lawmakers to act decisively. Among its key recommendations for the Gambling White Paper:
- Recognize the two-market reality: The legal industry must be protected not just by regulation, but through proactive enforcement against its illegal counterpart.
- Leverage technology: Real-time surveillance using AI and data analytics is crucial. Traditional methods like blocking URLs are outdated and ineffective.
- Reclaim vulnerable users: Rather than letting excluded users fall into criminal hands, systems must be developed to support and safeguard them long-term.
- Tackle offshore operators: Many illegal sites operate from “friendly” jurisdictions like Curaçao, Gibraltar, and Malta, using mirror domains and payment loopholes to bypass UK rules.
A Call for Unified Action
Yield Sec’s message is clear: solving the problem requires collaboration. Law enforcement, regulators, ISPs, banks, and advertising platforms must work together to cut off the “oxygen” that fuels illegal gambling, visibility, traffic, and payments.
Without coordinated oversight and a technology-driven approach, illegal operators will continue to exploit the gaps, and rake in billions doing so.
