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Higher taxes on Britain’s regulated online gambling industry could accelerate a shift to illegal offshore operators, according to a report by H2 Gambling Capital highlighted by the Betting and Gaming Council (BGC).
According to the report, the increase in Remote Gaming Duty to 40% from April this year, alongside lower onshore return-to-player (RTP) rates, could accelerate the migration of customers to unlicensed operators. It also warned that a planned increase in Remote Betting Duty from April 2027 could add further pressure on licensed firms.
As per the analysis, offshore online gambling turnover has risen from £5 billion in 2019 to £16.6 billion ($22.3 billion) and is projected to more than double to £36 billion by 2031.
The report forecast the illegal market’s share of online betting could rise from 10% in 2025 to 22% by 2031, while the regulated sector’s share would decline from 90% to 78%, meaning more than one in every five pounds wagered online could be placed with offshore operators.
It also projected illegal gambling revenues would more than double from £685 million in 2025 to £1.4 billion ($1.9 billion) by 2031, growing at nearly 13% annually. By comparison, Britain’s regulated online gambling market is expected to grow by just 0.2% a year and shrink by 12% in real terms over the same period.
The findings highlight the need to keep Britain’s regulated betting and gaming market competitive so consumers continue using licensed operators that offer consumer safeguards, the Betting and Gaming Council said.
“The Chancellor’s tax hikes are handing illegal gambling operators a competitive advantage,” Grainne Hurst, Chief Executive of the Betting and Gaming Council, 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, where there are no safer gambling protections, no age verification checks and no taxes paid to the Treasury.”
The BGC said Britain’s regulated betting and gaming industry supports more than 109,000 jobs, contributes about £4 billion in annual tax revenue and provides funding for British sport. It warned that higher taxes could threaten those contributions by strengthening the competitive position of illegal operators.
“The only winners from these tax hikes will be criminal operators based overseas,” Hurst warned.