UK Tax Hike Fuels Illegal Gambling Surge, BGC Warns Using H2 Data
2026-07-20
The BGC warns that the UK's tax increase on regulated online gambling is driving punters to unlicensed operators, with H2 data projecting the illegal market share will more than double to 22% by 2031.
The Betting and Gaming Council (BGC) has sounded a stark warning that Britain's sharp increase in Remote Gambling Duty is accelerating migration to unlicensed offshore operators, citing new projections from H2 Gambling Capital. Effective 1 April 2025, the duty rate jumped from 21% to 40% of gross gaming revenue, a 90% rise introduced in Chancellor Rachel Reeves' Autumn Budget. The BGC argues that this, combined with a planned Remote Betting Duty increase from April 2027, is handing a competitive edge to illegal sites that pay no tax and face no player-protection rules.
Illegal Market Projections
According to the H2 analysis, offshore online gambling turnover has already climbed from £5 billion in 2019 to £16.6 billion, and is forecast to more than double to £36 billion by 2031. The illegal market's share of total online betting is expected to rise from 10% in 2025 to 22% by 2031, meaning more than one in every five pounds wagered online could flow to unlicensed operators. Illegal gambling revenues are projected to more than double from £685 million to £1.4 billion, growing at nearly 13% annually, while Britain's regulated market is slated to expand by only 0.2% per year and shrink by 12% in real terms over the same period.
Regulatory and Fiscal Fallout
BGC chief executive Grainne Hurst described the situation as no laughing matter. "The Chancellor's tax hikes are handing illegal gambling operators a competitive advantage," she said. "If ministers keep making the regulated sector less competitive, customers won't stop betting. They'll simply take their money to the growing illegal black market." She also criticised the government's proposed financial risk assessments, which would require regulated customers to submit sensitive documents to justify spending. "If punters are forced to hand over bank statements," Hurst added, "many will simply walk away from the regulated market altogether."
The BGC noted that Britain's licensed betting and gaming industry supports 109,000 jobs, contributes £6.8 billion to the economy, and generates £4 billion in annual tax revenue. The council warned that higher taxes and additional regulatory burdens threaten to undermine these contributions by strengthening unlicensed competitors. "The only winners from these tax hikes will be criminal operators based overseas," Hurst concluded.