AS a one-time “hyper-prolific fraudster”, Alex Wood is maybe the ideal person to investigate the murky world of black market gambling.
The 43-year-old, who advises police forces, the Home Office and major banks, has the con artist’s eye for a scam.
As part of a probe into the unregulated industry, the former jailbird registered for one unlicensed gaming site using the name, date of birth and photo of wanted Pakistani terrorist Sajid Mir.
With astonishing ease, Alex, who now co-hosts Radio 4’s Scam Secrets, was able to play online slots as Mir, the alleged mastermind behind the 2008 Mumbai terror attacks that left 175 dead and 300 injured.
The lack of even rudimentary checks — insisted upon by licensed platforms — leaves the unregulated websites wide open to abuse by international organised crime.
Investigator Alex believes these Wild West platforms could even threaten our national security as they provide “utterly perfect” financial havens that terrorists and cross-Channel people smugglers could use to launder cash and shift it across borders.
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Stark warning
And he has raised concerns that crime networks could use the sites to siphon money off credit and debit cards stolen on British High Streets.
His findings come after The Sun this week launched our Save Our Bets campaign as Chancellor Rachel Reeves considers hiking tax on online gambling sites.
The proposed new rates — up from 16 to 25 per cent on sports betting and 21 to 50 per cent on gaming — threaten to drive punters into the arms of the unscrupulous black market casinos.
The shadowy operators behind them — often registered in remote corners of the Indian Ocean or the Philippines — face no scrutiny and deliberately target vulnerable punters.
And these fly-by-night firms pay no UK tax, which should be a flashing red light to the Treasury.
There is a stark warning from across the North Sea of what can happen when a nation implements higher gambling taxes on its licensed operators.
The Netherlands, which also introduced a ban on gambling adverts in sport and a limit on deposit sizes, has this year seen illegal operators win a greater revenue share than legal companies.
The Dutch Gaming Authority called it a “worrying development, because players in the illegal market are much less well protected”.
Any tax hike from the Chancellor here will almost certainly be passed on to punters in the form of worse betting odds.
Then market forces will likely drive those looking for value to the unregulated world where, without an added tax burden, more attractive prices will be available.
In 2021, Germany introduced a 5.3 per cent tax on every euro wagered — win or lose — on slots or poker.
Most countries tax gambling profits.
Punters there went looking for better value.
Now, just 40 per cent of revenue comes from licensed sites, with the tax take plummeting by 20 per cent.
A 2016 report by consultants Copenhagen Economics found that countries with the highest tax rates at the time — France and Portugal — had the lowest volume of licensed betting activity.
The UK, which had the lowest gambling tax, had the highest use of legitimate sites.
According to a 2021 United Nations report, global illegal gambling is worth £1.3trillion a year.
That is about three times the value of the world’s narcotics trade and the same size as the GDP of all the Scandinavian countries combined.
Some rogue platforms have a business model that helps explain their vast profits, with UK punters reporting being stiffed on their winnings or being unable to retrieve their deposits.
The unregulated sites often mimic legitimate games licensed by the Gambling Commission.
An increase in tax will hit the betting public hard
Brant Dunshea, chief executive of the British Horseracing Authority
New punters are enticed online with welcome offers of free bets and jackpots.
The virtual fruit machines, roulette wheels or straight sports gambling sites flash and beep in a kaleidoscope of intoxicating colours and sounds.
Some sites even proudly boast of being non-compliant with GamStop, a scheme that aims to prevent addicts betting on UK-licensed websites.
It was after being bombarded with “Not on GamStop” ads while playing non-betting games that investigator Alex decided to take a closer look at the dark world of black market gambling.
Born in Southend, Essex, he was a child prodigy violinist and studied at the Royal College of Music, but a wrist injury ended his career aged 24.
Instead of a life in music, he embarked on a two-decade crime spree, saying shamefacedly: “I stole vast sums of money and ruined businesses.”
Alex made headlines following his conviction for living free of charge in five-star London hotels for seven months while posing as the 12th Duke of Marlborough.
Jailed multiple times, he once stole £1.2million from a family firm in a single phone call where he pretended to be the company’s bank and conned them into wiring him the cash.
It was his mastery of this Authorised Push Payment (APP) fraud that raised his concerns when examining black market gambling.
Commissioned by Flutter UKI, which owns Paddy Power and Sky Bet, he was staggered by how easy it was to register and gamble using a fake identity.
Opening one account with online casino gododds.com, he signed up as a seven-year-old called Bo Peep and wagered £50 on a basketball game.
Fake identity
On the same site, he opened an account as Charles Dickens, aged 213, and had a flutter on the racing at Lingfield.
It was on slotsdynamite.com that he signed up as terrorist Sajid Mir.
Neither website responded to our requests for comment.
Alex says the lack of verification checks mean crooks can use the sites to take funds from stolen debit and credit cards.
He adds: “Within seconds, the funds can be drained from the card, through the gaming platform and into a crypto wallet on the other side of the world.”
Many cross-Channel traffickers employ the hawala payment system, an informal money transfer method based on trust.
Yet Alex points out that illegal gaming accounts would be “far less risky”, because the platforms carry out no checks into those registering.
The investigator said: “In view of how incredibly easy this mechanism would make the lives of the people- traffickers, I would be amazed if they were not already using it.”
The black market sites are clearly a menace to problem gamblers, too.
As a fresh sign-up, Alex was offered £2,000-a-spin plays on slot machines on two platforms. The per-spin legal limit in this country is £5.
Alex’s findings offer a stark warning for the Chancellor as she considers her latest tax raid.
The black market sites are clearly a menace to problem gamblers
Brant Dunshea, chief executive of the British Horseracing Authority, told The Sun: “An increase in tax will hit the betting public hard.
“It will see bookmakers offering worse odds to offset the cost, which will drive punters to the growing black market.
“This will also result in less money going back into racing and to the Treasury.”
The Institute for Public Policy Research — one of the left-wing think tanks behind the call for a tax hike — concedes that licensed firms “will seek to protect their bottom lines by worsening odds”.
However, they think there is little evidence that large numbers of punters will seek out better prices on the black market.
Yet company EY, which advises leading firms and governments on tax, analysed the proposed hike and believes it would have “profoundly negative unintended consequences”.
Commissioned by the Betting and Gaming Council, EY estimates as much as £8.4billion of punters’ cash could be diverted to unlicensed operators.
It added that 40,000 jobs employed directly and indirectly by the gambling industry are at risk.
And that the proposal might generate just £500million of the £3.2billion that proponents say could swell Treasury coffers.
Ominously, a recent report by Yield Sec found black market sites have tripled their share of the British gambling market in just three years.
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Alex now wants the Gambling Commission to prevent UK bank account holders from being able to make transactions with unlicensed accounts.
And the man who was once the King Rat of fraud added: “We have to shine a light on the black market before it’s too late.”
