From vape shops to gambling: the rise and rise of the black market
A recent BBC investigation uncovered more than 100 UK businesses linked to Kurdish gangs, allegedly enabling migrants to work illegally selling counterfeit cigarettes, prescription medicines and illegal drugs through High Street mini-marts.
The investigation did not just uncover the existence of black-market hotspots, but the state’s inability to prevent their growth. Shops were shut down only to reopen days later under technical pretences of new ownership, despite being run by the same gangs. The BBC even found men previously convicted of selling illegal cigarettes returning to run black-market stores.
What is driving the rise of the black market? Is excessive regulation – for example, eye-watering VAT on cigarettes – creating stronger incentives for consumers and businesses to operate outside the law? Or is there a more fundamental problem with the state seeming unable to tackle rising organised crime?
Gambling is one of the UK’s most over-regulated and under-loved industries. Andy Burnham, for example, recently lumped legal betting shops with illegal barbershops when announcing new policies for the High Street. Meanwhile, illegal gambling is growing rapidly and is now estimated to account for around 10 per cent of the market. As the Betting & Gaming Council warns, these operators: ‘do not follow British rules. They do not carry out the checks required to protect customers. They do not contribute to research, prevention and treatment. They do not pay UK tax.’
The government appears largely indifferent to the rise of the gambling black market, continuing to push for ever more stringent regulation on legal sites. Deposit limits and affordability checks are redundant if they convince frustrated customers to turn to unregulated sites with no limits or protections to stop problem gamblers from betting.
From cigarettes to slot machines, at what point do tougher rules on legitimate businesses simply hand more customers to criminal operators? Can the state credibly crack down on illegal gambling, counterfeit goods and illicit trade while making it ever harder for legal businesses to compete? Does Britain need more regulation – or a more capable state to enforce the laws we already have?
