UK Remote Gaming Duty Hike Risks Illegal Gambling Growth

The United Kingdom’s recent increase in Remote Gaming Duty (RGD) to 40% from April 2026 has prompted warnings from the Betting and Gaming Council (BGC) and independent analysts that the move could accelerate the migration of customers toward offshore operators. Research conducted by H2 Gambling Capital indicates that the tax rise, combined with lower onshore return-to-player (RTP) rates, is already influencing the shift, with additional duty increases scheduled for April 2027 expected to intensify the effect.

Surge in Offshore Betting

According to the report [pdf], offshore online gambling turnover has surged from £5 billion in 2019 to £16.6 billion in 2026. Projections suggest it could more than double again to £36 billion by 2031. The illegal sector’s share of online betting is forecast to increase from 10% in 2025 to 22% by 2031, while licensed operators’ share will fall from 90% to 78%. In practical terms, this means that more than one in every five pounds staked online could bypass the regulated market entirely.

Grainne Hurst, Chief Executive of the BGC, stressed the wider implications for the UK: “The Chancellor’s tax hikes are handing illegal gambling operators a competitive advantage. Britain has one of the world’s leading regulated betting industries, supporting more than 109,000 jobs, generating £4 billion in tax every year and funding some of our most-loved sports. But 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, where there are no safer gambling protections, no age verification checks and no taxes paid to the Treasury.”

The analysis anticipates that illegal gambling revenues will more than double from £685 million in 2025 to £1.4 billion by 2031, growing at nearly 13% per year. Meanwhile, Britain’s regulated online market is expected to grow by only 0.2% annually and to decline by 12% in real terms over the same period.

Calls for Policy Reassessment

Hurst noted that criminal operators will benefit from the regulatory gap created by higher taxes, leaving licensed operators at a disadvantage and putting jobs, investment, and tax revenue at risk. “The only winners from these tax hikes will be criminal operators based overseas,” she warned in BGC’s press release.

The BGC highlighted the importance of maintaining a competitive regulated market, emphasizing that customers should have reasons to choose licensed operators over illegal platforms. Licensed operators provide robust consumer protections, verified age checks, and contribute tax revenues that support national sports and infrastructure. The council underscored that continued growth in the illegal sector could compromise consumer safety while eroding the financial contributions of a compliant industry.

Maintaining a Competitive Market

Industry stakeholders are calling for careful consideration of policy changes to ensure the long-term sustainability of the UK’s gambling sector. The report by H2 Gambling Capital underscores the need for a balance between fiscal measures and the operational health of licensed operators, as the current trajectory suggests a widening gap between regulated and unregulated markets.

The BGC urges policymakers to evaluate the unintended consequences of further tax hikes, emphasizing that a competitive licensed market benefits consumers, supports jobs, and secures funding for sports and public services.