UK Tax Hikes Could Accelerate Shift to Illegal Gambling, Warns BGC
A new H2 Gambling Capital report warns that UK tax hikes on regulated gambling could push bettors toward the growing illegal offshore market, the BGC says.
The Betting and Gaming Council (BGC) is sounding the alarm over Britain’s regulated gambling market, warning that recent tax increases could push more bettors toward unlicensed offshore operators. A new report from H2 Gambling Capital, highlighted by the BGC, found that the jump in Remote Gaming Duty to 40% starting in April, combined with lower onshore return-to-player rates, is already accelerating that shift, with a planned hike to Remote Betting Duty set for April 2027 expected to make things worse.
The findings arrive at a tense moment for the UK gambling industry, which has spent much of the past year absorbing the fallout from Chancellor Rachel Reeves’ autumn budget. That budget confirmed Remote Gaming Duty would climb from 21% to 40% and set online General Betting Duty on a path to 25% by 2027, decisions the BGC has repeatedly argued will do more harm than good.
Offshore Betting Already Surging
According to the H2 Gambling Capital analysis, offshore online gambling turnover has ballooned from £5 billion in 2019 to £16.6 billion (about $22.3 billion) today, and it’s projected to more than double again to £36 billion by 2031. The report forecasts the illegal market’s share of UK online betting rising from 10% in 2025 to 22% by 2031, while the regulated sector’s share falls from 90% to 78% over the same stretch — meaning more than one in every five pounds wagered online could eventually end up with an offshore operator.
The revenue implications are just as stark. Illegal gambling revenues are projected to more than double, from £685 million in 2025 to £1.4 billion (roughly $1.9 billion) by 2031, growing nearly 13% a year. Britain’s regulated online market, by contrast, is expected to grow just 0.2% annually and could shrink by 12% in real terms once inflation is factored in.
BGC Says Regulated Operators Are Losing Ground
BGC Chief Executive Grainne Hurst didn’t mince words in response to the findings. “The Chancellor’s tax hikes are handing illegal gambling operators a competitive advantage,” Hurst 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 points to what it sees as a lopsided trade-off: Britain’s regulated betting and gaming industry supports more than 109,000 jobs and contributes roughly £4 billion in annual tax revenue, while also helping fund British sport, including horse racing. The council argues that squeezing licensed operators with higher duties doesn’t just cost the Treasury potential revenue — it actively strengthens the hand of unregulated competitors that pay nothing at all.
“The only winners from these tax hikes will be criminal operators based overseas,” Hurst warned, echoing concerns she raised earlier this year at the BGC’s annual meeting, where she described the black market as “the single biggest threat facing our industry.”
What Happens Next
With the Remote Betting Duty increase still more than a year away, the BGC is likely to keep pressing the government to reconsider its approach before the 2027 hike takes effect. For bettors, the fight over tax policy is really a fight over where they can safely place a wager — regulated UK operators offer consumer protections like age verification and safer-gambling tools, while offshore books offer none of that oversight. As the debate plays out in Westminster, US bettors following the industry can compare how regulated sportsbook reviews stack up against operators that skip licensing requirements altogether — a dynamic that mirrors exactly what the BGC is warning UK regulators about.