UK Gambling Tax Rises Could Fuel £36bn Black Market by 2031

The Betting and Gaming Council (BGC) has warned that recent UK gambling tax rises could more than double the size of the illegal black market, pushing offshore turnover toward £36bn by 2031. A new H2 Gambling Capital analysis released by the BGC on July 16, 2026 links higher duties, including a Remote Gaming Duty increase that took effect in April 2026, to accelerating growth in unlicensed betting and gaming. BGC chief executive Grainne Hurst said the Chancellor's tax hikes are "handing illegal gambling operators a competitive advantage," and the trade body projects the illegal share of the market climbing from around 10% in 2025 to 22% by 2031.

What does the BGC report actually say?

The report says UK tax increases are shifting demand from the licensed market into the untaxed, unregulated offshore market, and it puts numbers on that drift out to 2031. According to the H2 Gambling Capital analysis shared by the BGC, offshore online gambling turnover is projected to rise from £16.6bn in 2026 to roughly £36bn by 2031, while illegal gambling revenue grows from about £685m in 2025 to £1.4bn by 2031. The headline argument is that squeezing the regulated sector with higher duty does not remove demand, it relocates it to operators who pay no UK tax and apply none of the UK's consumer protections.

Key facts at a glance

• UK black market gambling stakes reached £16.6bn, up from £5bn in 2019, more than tripling over the period, according to H2 Gambling Capital analysis released by the BGC (2026).
• The illegal market's share is projected to rise from around 10% in 2025 to 22% by 2031, with the licensed sector's share falling from 90% to 78% (H2 Gambling Capital, 2026).
• The licensed UK industry supports about 109,000 jobs and generates roughly £4bn in annual tax, figures the BGC uses to frame the cost of ceding share to offshore rivals (BGC, 2026).

Which taxes triggered the warning?

The trigger is a series of duty increases on online gambling that the BGC says tip the economics toward offshore operators. The report ties the projected surge to a rise in Remote Gaming Duty that took effect in April 2026, with a further increase to betting duty scheduled for April 2027. The BGC's position is that each rise widens the price and product gap between licensed operators, who must fund UK taxes, affordability checks and safer-gambling measures, and unlicensed sites that carry none of those costs.

Who is Grainne Hurst and what did she say?

Grainne Hurst is the chief executive of the Betting and Gaming Council, the standards body for the UK's licensed betting and gaming industry. She has framed the tax debate as a direct driver of black market growth rather than a neutral revenue measure.

"The Chancellor's tax hikes are handing illegal gambling operators a competitive advantage." Grainne Hurst, Chief Executive, Betting and Gaming Council

In earlier BGC commentary on the same body of research, Hurst warned that "what we are seeing is a harmful black market scaling up at pace," adding that "illegal operators are becoming more sophisticated, more visible and more aggressive in how they reach UK customers."

How fast has the UK black market grown?

The black market has more than tripled in six years by the BGC's numbers. Analysis from H2 Gambling Capital puts unlicensed stakes at £16.6bn, up from £5bn in 2019, with stakes and margins accelerating sharply in the past two years. Over the same window, the share of UK gambling flowing through regulated operators has slipped from about 97% in 2019 to roughly 92% by 2025, a small percentage move that represents billions of pounds in displaced activity.

What happens to the regulated market?

The regulated market is forecast to stall in real terms even as the overall gambling market grows. The BGC report projects licensed sector annual growth of just 0.2%, which it frames as a real terms decline of around 12% once inflation is accounted for, as higher duties erode margins and price-sensitive customers migrate offshore. That combination, near-flat nominal growth against a shrinking real base, is the core of the industry's warning that tax rises are self-defeating.

Is the advertising market shifting too?

Yes. Unlicensed operators now account for close to half of all gambling advertising aimed at UK customers, according to figures the BGC has cited alongside this analysis, and that share is projected to exceed 50% within two years. The advertising trend runs in parallel with the government's separate move to ban unlicensed gambling sponsors in sport, underlining how visible offshore brands have become across British sport and media.

How does the tax argument compare to the government's view?

Point	BGC position	Policy context
Effect of higher duty	Pushes demand to untaxed offshore operators	Higher duty intended to raise revenue and curb harm
Black market size	£16.6bn stakes, rising toward £36bn turnover by 2031	Government prioritising safer gambling and enforcement
Market share	Illegal share 10% (2025) to 22% (2031)	Licensed share seen falling from 90% to 78%
Consumer protection	Offshore sites offer none of the UK safeguards	Ministers treating gambling harm as a public health issue

What is the counter-argument?

Public health advocates and some policymakers argue that the industry overstates black market projections to resist reform. They point out that H2 Gambling Capital's analysis is commissioned and released by the BGC, that "black market" estimates are inherently uncertain, and that higher duties and tighter checks are designed to reduce gambling harm even if some activity moves offshore. Campaigners have urged ministers to treat gambling harm as a public health crisis, prioritising consumer protection over industry revenue concerns. The debate turns on how much displaced demand actually ends up on illegal sites versus simply not being staked at all.

How does this fit the wider crackdown on illegal gambling?

It sits inside a broader European and UK push against unlicensed operators on multiple fronts. Alongside the tax debate, UK regulators are tightening enforcement and consumer protection, while other markets pursue technical blocking, such as Greece's move to DNS-level blocking of illegal gambling domains. The BGC's framing is that tax policy and enforcement need to pull in the same direction, because raising duty without also shutting down offshore access simply hands illegal operators a larger, cheaper market.

What does it mean for licensed operators?

For licensed operators, the report is both a warning and a lobbying tool. It signals margin pressure from April 2026 duty changes and a further betting duty rise in April 2027, and it arms the industry with figures to argue against additional increases at the next Budget. Operators are likely to respond with cost cuts, product changes and renewed calls for tougher action against offshore competitors, while regulators weigh whether higher duty is compatible with the stated goal of channelling players into the safer, licensed market.

What happens next?

The immediate flashpoint is the next UK fiscal event, where the BGC will press the Treasury to hold or reverse course on gambling duty using these projections. In parallel, the further betting duty increase due in April 2027 gives the industry a fixed date to campaign against. Whether the black market reaches £36bn by 2031 will depend on the interplay of tax levels, enforcement against unlicensed sites, and how effectively the licensed sector can keep customers inside the regulated market.

Updated July 2026

This article reflects the H2 Gambling Capital analysis released by the Betting and Gaming Council as reported on July 16, 2026, with baseline black market figures drawn from the same body of BGC research published earlier in 2026. Primary reporting via iGaming Future and Gambling News.

Frequently asked questions

How big is the UK gambling black market?

Analysis from H2 Gambling Capital released by the BGC puts UK black market stakes at £16.6bn, up from £5bn in 2019. The trade body projects offshore turnover could reach around £36bn by 2031 if tax rises continue.

Which UK gambling taxes are increasing?

The BGC report ties black market growth to a Remote Gaming Duty increase that took effect in April 2026 and a further betting duty rise scheduled for April 2027.

What share of the market is illegal?

The BGC projects the illegal market's share rising from around 10% in 2025 to 22% by 2031, with the licensed sector's share falling from 90% to 78% over the same period.

What did the BGC chief executive say?

Grainne Hurst, chief executive of the Betting and Gaming Council, said the Chancellor's tax hikes are handing illegal gambling operators a competitive advantage, and warned the black market is scaling up at pace.

Why does the BGC oppose higher gambling taxes?

The BGC argues higher duty does not reduce demand but relocates it to untaxed offshore operators that offer none of the UK's consumer protections, shrinking the regulated market that supports about 109,000 jobs and £4bn in annual tax.