A proposed increase in the UK's online betting tax could prompt a mass shift of players to unregulated gambling sites, according to a new survey and industry experts.
Research conducted by YouGov revealed that 65% of bettors in Great Britain believe a rise in online gambling taxes would encourage customers to turn to offshore, untaxed operators. The findings suggest that higher costs passed on to players could fuel black market activity and undermine regulated platforms.
This concern comes amid an ongoing consultation by the UK Treasury, which launched in May and runs until 21 July. The consultation proposes replacing three existing tax bands - Remote Gaming Duty (RGD), General Betting Duty (GBD), and Pool Betting Duty (PBD) - with a single, unified Betting & Gaming Duty (BGD). Currently, RGD applies a 21% tax on operator profits, while GBD and PBD are both taxed at 15%.
Industry stakeholders have raised alarms over the uncertainty surrounding the new rate. Many fear it could align with the highest existing rate, 21%, putting additional pressure on already squeezed profit margins.
Melanie Ellis, a partner at Northridge Law, cautioned that such a move would disproportionately impact smaller operators.
"Particularly, smaller and newer brands who are trying to grow their market share" may struggle to survive, she said. While some companies might weather a modest rate increase, she warned that many are "already operating on tight margins."
The Betting and Gaming Council (BGC), which represents the UK's regulated betting industry, echoed these concerns, warning that a higher tax burden would force bookmakers to reduce odds to preserve profitability. This, in turn, could shrink the market, leaving only the biggest players standing, and pushing many consumers into riskier, unregulated territory.
"This in itself is likely to drive customers to the black market, and unfortunately, it's those that are most vulnerable who will be most affected," Ellis added.
BGC Reiterates Opposition to Higher Taxation
The BGC has previously cautioned that raising taxes on gambling could threaten the viability of popular sports, including horse racing. Following the YouGov findings, BGC CEO Grainne Hurst called on the government to reconsider the move.
"This shocking statistic proves what's at stake if the government forces through a self-defeating tax hike on ordinary punters," Hurst said. "It's clear it will not raise more tax. It simply risks forcing huge numbers of customers out of the regulated market, with its world-leading standards on player safety, into the arms of the growing, illegal, unregulated and unsafe gambling black market online."
She also argued that such a tax would conflict with the government's stated goals. "This is a wake-up call for government," Hurst stressed. "Punters have been loud and clear: Hit them with further taxes and they will walk away from sports like racing, straight to the black market, triggering a spiral of decline."
Backing up its claims, the BGC pointed to its own recent analysis estimating that UK players bet up to £2.7 billion annually with unlicensed gambling providers. These platforms, the group warned, offer no tax revenue, make no contributions to UK sports, and often prey on vulnerable individuals, including those who have self-excluded from gambling.
"This growing, unsafe, illegal gambling black market does not contribute to sport," the BGC stated. "It does not pay tax and targets customers who are vulnerable to harm, including the self-excluded."
Source:
https://igamingbusiness.com/finance/bgc-betting-tax-hike-black-market/
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