UK gambling firms have been accused of exaggerating the scale of black market betting, in an attempt to fend off tougher legislation from the Government.

The 2005 Gambling Act is currently under review, with several areas of the industry set for changes to help modernise the act.

Leading figures within the gambling industry have been backing a report claiming that 200,000 people in the UK spend £1.4bn ($1.9bn) on black market sites every year, warning that tougher regulation could result in further customers moving into this dangerous area of unprotected gambling.

But Gambling Commission chief executive Neil McArthur has dismissed the report – written by consultancy PwC – as “not consistent with the intelligence picture,” arguing that it lacks any evidence to show an increase in illicit betting.

In a letter to a cross-party group of MPs examining gambling-related harm, McArthur said: “We know that licensed operators and their trade bodies are concerned about the impact of the illegal market, but our own evidence suggests the impact may be being exaggerated.

“In any event, we are not convinced by the argument that suggests raising standards in the licensed market will prompt consumers to gamble with illegal operators.”

McArthur also emphasised that the report should be treated with caution, suggesting it fails to distinguish between real customers and automated systems or bots.