A fresh wave of controversy has hit the UK’s online gambling market as the government proposes new tax hikes. The Betting and Gaming Council (BGC) has issued a stark warning in response. Citing recent survey data and economic concerns, the BGC is urging policymakers to prioritise stability over short-term revenue gains, arguing that additional fiscal pressure could cause more harm than good, both for the industry and for consumers.
Instead of curbing problem gambling or boosting revenue, the tax hike may push players away from regulated sites and into the arms of black market operators who offer zero protections and no accountability. That’s a serious concern, especially for an industry that supports over 100,000 jobs and contributes billions to the UK economy.
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BGC Sounds the Alarm
The UK has been enjoying an impressive period of economic growth, leading the G7 with a 0.7% GDP increase in the first quarter of 2025. However, the government’s proposal to merge three separate gambling tax categories, Remote Gaming Duty, General Betting Duty, and Pool Betting Duty, into a single Remote Betting and Gaming Duty could prove detrimental to the industry.
Undoubtedly, the gambling industry is a significant contributor to the UK economy, supporting more than 100,000 jobs and generating £6.8 billion annually, alongside £4 billion in tax revenue. However, the sector is already facing mounting challenges, including the financial impact of recent regulatory reforms introduced in the 2023 Gambling White Paper, which are expected to cost over £1 billion each year.
Retail betting outlets have experienced a notable decline, with over 2,400 shops closing since 2019, leaving fewer than 6,000 still in operation. The BGC fears that further tax increases could accelerate this downward trend, affect local economies and reducing employment opportunities. Moreover, it could have a ripple effect on the black market, pushing unsuspecting players towards unregulated platforms and exposing them to risks such as stolen winnings and compromised personal information.
Major Blow to Smaller Operators
The diversity of the online gambling industry is under threat, with smaller and newer operators struggling to cope with higher tax rates. This shift could benefit only the largest companies, which are better positioned to absorb the additional costs and dominate the market. With fewer operators competing, these dominant firms may wield disproportionate influence over pricing and product offerings, potentially to the detriment of consumers.
Moreover, with limited choices available, consumers may be forced to settle for unsatisfactory platforms or even be pushed towards the black market. This lack of diversity raises serious concerns about market fairness, as new entrants and smaller businesses find it increasingly difficult to enter or survive in the sector, ultimately stifling innovation and reducing the overall vibrancy of the UK gambling industry.
Economic Clash
Just one year on from Labour’s return to power following its 2024 election victory, critics have raised concerns that the government’s proposed tax increase on online gambling could clash with its broader pro-growth agenda by destabilising a key sector of the economy. The Betting and Gaming Council (BGC) has been vocal in warning that this move could prove detrimental, pushing players into the hands of illegal offshore gambling sites. This unintended consequence could ultimately reduce the very tax revenue the policy intends to increase, while also harming adjacent sectors such as horse racing, which rely heavily on regulated betting for financial support.
According to recent BGC research, British consumers already spend up to £2.7 billion annually through unlicensed platforms. These operators not only fail to contribute to the UK economy, but also expose players, particularly those most vulnerable, to unsafe gambling environments with no regulatory oversight or player protections.
If the proposed tax changes accelerate the growth of this black market, the government may be forced to reconsider its approach. A policy designed to boost revenue and support public services could, in practice, lead to lost income, weakened consumer protections, and long-term damage to one of the UK’s most heavily regulated, and economically significant, entertainment sectors.
The government must recognise that the economy benefits from a well-regulated online gambling market. Instead of penalising those who follow the rules, it should focus its efforts on tackling black market platforms that offer nothing but harm.
