The British gambling industry is facing the risk of increased tax burdens. The Betting and Gaming Council (BGC) cited a recent survey indicating that if the government proceeds with plans to uniformly increase the online gambling tax rate, two-thirds of gamblers might abandon licensed platforms and turn to unregulated black market operators.
A survey conducted by YouGov shows that 65% of British players are concerned that if the tax burden is passed on to consumers, it will force more people to illegal websites. These platforms usually do not pay taxes and lack basic user protection measures.
Proposed new policy: A merger of three taxes, causing widespread concern
The UK Treasury launched a tax consultation in April, suggesting the unification of the current three gambling tax rates—Remote Gaming Duty (RGD), General Betting Duty (GBD), and Pool Betting Duty (PBD)—into a single "Betting and Gaming Duty" (BGD). Although the specific tax rate has not yet been determined, it is generally expected within the industry that the new tax rate will be based on the current RGD level of 21%, meaning most operators will face heavier tax burdens.
Currently, the RGD rate is 21% of profits, while GBD and PBD rates are only 15%. The industry is concerned that once the merged tax rate is set at a higher level, small and medium-sized gambling companies with already slim profits will be the first to be hit.
Small operators may be eliminated
Melanie Ellis, a partner at Northridge Law, stated that many small operators struggle to bear additional tax burdens, especially those emerging brands still trying to expand their market share.
"Every percentage point increase in the tax rate significantly compresses the already limited profit margins," she said. "To survive, some operators might have to offer worse odds, which could weaken the overall market competitiveness."
Ellis further pointed out that this environment might push users towards the black market, especially those who are price-sensitive. "Unfortunately, the most vulnerable groups will be the first to be affected," she added.
BGC: Tax increases will backfire
Grainne Hurst, CEO of BGC, also warned the government that any rash tax increase measures could endanger the stability of the regulated market and potentially harm traditional sports such as horse racing that rely on gambling revenue.
"This survey data is shocking. It shows that if the government insists on increasing gambling taxes, it will only push a large number of gamblers towards unregulated, higher-risk black market platforms," Hurst pointed out.
She emphasized that this trend would directly threaten the government's tax revenue goals and the market regulatory system. "This is not about expanding the tax base, but about giving up regulatory achievements."
The black market size has already reached £2.7 billion
BGC cited its recent research indicating that the annual transaction volume of the UK black market online gambling activities has reached £2.7 billion. Black market platforms not only evade taxes but also do not provide responsible gambling tools and even accept users who have self-excluded from licensed platforms.
"This unregulated illegal market contributes nothing to sports and poses a significant risk to vulnerable groups," BGC stated.
Hurst urged the newly appointed Labour government to think twice. "If we push legal players towards the black market, not only will the government's finances suffer, but the entire industry's development will also fall into a vicious cycle."
