H2 Gambling Capital: UK Tax Hikes Could Drive Illegal Betting Surge
2026-07-16
Source: iGaming Future
A new H2 Gambling Capital analysis forecasts that UK tax increases will push illegal online gambling turnover to £36bn by 2031, with the black market's share rising to 22%, prompting the BGC to warn of severe economic consequences.
A report from H2 Gambling Capital warns that recent and planned increases to UK gambling duties may significantly expand the unlicensed online betting market through to 2031. The analysis points to the rise in Remote Gaming Duty to 40% from April 2026, coupled with lower return-to-player rates among regulated operators, as key factors pushing players toward offshore sites. An additional hike in Remote Betting Duty is scheduled for April 2027.
H2 projects that offshore gambling turnover will climb from £16.6bn in 2026 to £36bn by 2031, following growth from £5bn in 2019. The illegal market's share of online betting is forecast to jump from 10% in 2025 to 22% by 2031, while the regulated segment's share drops from 90% to 78%. Illegal gambling revenue is anticipated to rise from £685m in 2025 to £1.4bn in 2031, representing annual growth of nearly 13%. In contrast, the licensed online market is expected to see only 0.2% annual nominal growth, declining by 12% in real terms over the same period.
The Betting and Gaming Council (BGC) highlighted the findings as evidence that policymakers must preserve the competitiveness of the legal market to keep customers from migrating offshore. The trade body warned that unchecked illegal market growth could reduce tax receipts, employment, and funding generated by the UK's regulated betting and iGaming sector.
Grainne Hurst, Chief Executive of the BGC, commented: "The Chancellor’s tax hikes are handing illegal gambling operators a competitive advantage." She added that customers will not stop betting but will instead turn to the black market, which lacks safer gambling protections, age verification, and tax contributions. Hurst concluded that criminal operators overseas are the only beneficiaries, while the UK risks losing jobs, investment, and tax revenue.