Stakes on black market operators in the UK are predicted to more than double in the next five years, reaching an estimated £36bn by 2031, according to latest analysis from H2 Gambling Capital.
The research firm, which was acquired by EGR parent company Burghclere earlier this month, forecasts the illegal market’s share of online betting will more than double from 10% in 2025 to 22% by 2031, as channelisation falls from 90% to 78%.
April’s hike in remote gaming duty to 40% and next April’s increase in remote betting duty to 25% will be the key drivers of the leakage to the black market, H2 said, with operators forced to reduce generosity to maintain margins.
The report also forecasts illegal gambling revenues will more than double from £685m in 2025 to £1.4bn by 2031, growing at almost 13% a year, while Britain’s regulated online market is predicted to grow just 0.2% annually and shrink by 12% in real terms over the same five-year period.
Responding to the research, Grainne Hurst, CEO of the Betting and Gaming Council (BGC), warned the 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 £4bn in tax every year and funding some of our most-loved sports,” she said.
“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.”
H2’s research comes a week after the Gambling Commission (GC) confirmed the rollout of controversial Financial Risk Assessments (FRAs), which could be another driver of black market growth, according to Hurst.
Commenting on the GC announcement last week, the BGC CEO said the trade body was “deeply disappointed and frustrated” that FRAs were being launched without details on the pilot scheme being released.
“Until the Commission can demonstrate these checks are accurate, consistent and genuinely frictionless, our fundamental concerns remain, including the risk of driving customers towards the growing illegal gambling market,” she added.
Leading operators have also been increasingly vocal about the impact of tax and regulation on the licensed market in recent months.
Speaking at iGB Live earlier this month, Entain’s group director of corporate and regulatory affairs Ross Parker warned the UK gambling industry faces an “ecosystem-wide threat” from the unlicensed market, which has been exacerbated by a stricter regulatory landscape.
Parker pointed to unregulated operators outbidding licensed firms for advertising space, including on Premier League shirts, although there has been some positive movement here with the government opening a consultation on a total ban on unlicensed firms signing sports sponsorship deals.
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Latest modelling from research firm forecasts market share for unlicensed firms will jump from 10% to 22% within five years as legal operators grapple with duty increases
The post H2 Gambling Capital: UK black market stakes to hit £36bn by 2031, as tax hikes bite first appeared on EGR Intel.