Betting and Gaming Council warns black market growth after tax rise

The Betting and Gaming Council has issued a strong warning that the illegal gambling market in the United Kingdom is already expanding at a concerning pace and could accelerate further following recent fiscal and regulatory developments introduced by the government.

As the new tax year begins on April 1, a date often associated with lighthearted humor, industry leaders stress that the issue at hand is far from trivial. According to the Council, billions of pounds are currently being wagered through unregulated platforms, raising concerns about consumer safety, loss of tax revenue and the long-term sustainability of the licensed gambling sector.

The warning comes in response to measures announced in the Autumn Budget by Rachel Reeves, which include significant increases in gambling-related taxation. Industry representatives argue that while the intention may be to regulate and generate revenue, the unintended consequences could undermine the regulated market.

Impact of Remote Gaming Duty increase

One of the most significant changes introduced at the start of the tax year is the increase in Remote Gaming Duty. The rate has risen from 21 percent to 40 percent, marking a substantial shift in the cost structure for licensed operators.

The Betting and Gaming Council has expressed concern that such a steep increase places additional financial pressure on regulated businesses, making it more difficult for them to remain competitive. Licensed operators are required to comply with strict regulations, including player protection measures, responsible gambling initiatives and financial reporting obligations. These requirements already contribute to higher operational costs compared to illegal operators.

Illegal gambling platforms, by contrast, operate outside the regulatory framework. They do not pay taxes, are not subject to oversight and are not required to implement safeguards designed to protect players. This disparity allows them to offer more attractive odds, bonuses and incentives, which can draw consumers away from legitimate providers.

Economic contribution of the regulated sector

The regulated betting and gaming industry plays a significant role in the UK economy. According to industry data, it supports approximately 109,000 jobs and contributes around £6.8 billion annually to the economy. In addition, it generates roughly £4 billion in tax revenue for the government.

Beyond direct economic contributions, the sector also provides essential funding for sports, including horse racing, football and other professional and grassroots activities. These contributions are often highlighted as a key benefit of maintaining a robust and well-regulated gambling market.

Industry stakeholders argue that policies which inadvertently weaken the regulated sector could have broader economic implications. A shift toward unregulated platforms may reduce tax receipts, threaten jobs and diminish funding for sports and community initiatives.

Concerns over Financial Risk Assessments

In addition to tax changes, proposed regulatory measures such as Financial Risk Assessments have raised further concerns within the industry. These assessments are intended to identify individuals who may be at risk of gambling-related harm by evaluating their financial circumstances.

Ministers have indicated that such checks would be implemented in a frictionless manner, minimizing disruption to consumers. However, trials conducted by the Gambling Commission using data from Credit Reference Agencies have reportedly produced inconsistent outcomes.

Industry representatives have warned that if these checks require customers to provide sensitive financial information such as bank statements, many may be reluctant to comply. This reluctance could lead some individuals to seek alternatives outside the regulated market, where such requirements do not exist.

Industry perspective on regulatory balance

Grainne Hurst, Chief Executive Officer of the Betting and Gaming Council, has publicly addressed these concerns, emphasizing the urgency of the situation. She stated: “This is not a future threat, it is already happening.

“Billions of pounds are being staked with harmful illegal operators and the black market is growing fast.

“Following the Chancellor’s Budget, the black market is continuing to grow. Rising taxes on the regulated sector are making it harder for licensed operators to compete, while illegal sites continue to offer better odds and bigger incentives because they pay no tax and follow no rules.

“At the same time, there is a real danger that measures like Financial Risk Assessments make matters worse. Ministers promised frictionless checks, but trials have already raised serious questions about whether they will work as intended.

“If punters are forced to hand over bank statements and other sensitive financial documents, many will simply walk away from the regulated market altogether.”

These statements reflect the industry’s broader concern that well-intentioned policies may inadvertently create conditions that favor illegal operators.

The growing appeal of illegal platforms

The rise of illegal gambling platforms is not unique to the United Kingdom, but recent developments suggest the trend may be accelerating domestically. Unregulated operators often leverage aggressive marketing tactics, attractive promotions and fewer restrictions to attract users.

From a consumer perspective, the absence of identity verification processes or financial checks may appear convenient. However, these platforms typically lack essential protections such as dispute resolution mechanisms, secure payment systems and responsible gambling tools.

Regulators and industry bodies have repeatedly highlighted the risks associated with unlicensed operators, including potential fraud, lack of data protection and limited recourse in the event of disputes.

Policy challenges and future outlook

The situation presents a complex challenge for policymakers. On one hand, there is a clear objective to protect consumers and ensure that gambling activities are conducted responsibly. On the other hand, excessive taxation and regulation may have unintended consequences that undermine these goals.

Achieving the right balance will likely require ongoing dialogue between government authorities, regulators and industry stakeholders. Evidence-based policymaking, supported by comprehensive data and transparent evaluation, may help mitigate risks while preserving the benefits of a regulated market.

The coming months will be critical in determining how these dynamics evolve. Monitoring the impact of tax changes and regulatory measures will provide valuable insights into their effectiveness and potential areas for adjustment.

Conclusion

The warnings issued by the Betting and Gaming Council highlight a growing tension within the UK gambling landscape. While regulatory reforms and tax increases are designed to strengthen oversight and generate revenue, they may also create conditions that encourage the expansion of illegal gambling markets.

The challenge lies in ensuring that the regulated sector remains competitive, attractive and capable of delivering strong consumer protections. If the balance is not carefully managed, there is a risk that more players will migrate to unregulated platforms, reducing transparency and increasing potential harm.

A sustainable approach will require thoughtful coordination between policymakers and industry participants, with a focus on maintaining high standards while avoiding unintended consequences. The evolution of this issue will likely shape the future of the UK gambling industry for years to come.

FAQs

What is the Betting and Gaming Council?
The Betting and Gaming Council is a UK trade body representing licensed betting and gaming operators and advocating for responsible regulation.

Why is the illegal gambling market growing?
Industry representatives suggest that higher taxes and stricter regulations may push some consumers toward unregulated platforms.

What is Remote Gaming Duty?
Remote Gaming Duty is a tax applied to online gambling operators in the UK.

How much has the tax increased?
The rate has increased from 21 percent to 40 percent starting April 1.

What are Financial Risk Assessments?
They are proposed checks designed to assess a player’s financial situation to identify potential gambling harm.

Why are these assessments controversial?
There are concerns that they may require sensitive financial data and discourage users from regulated platforms.

What risks do illegal gambling sites pose?
They often lack consumer protections, regulatory oversight and secure payment systems.

How does the regulated industry benefit the economy?
It supports jobs, contributes billions in tax revenue and funds sports and community initiatives.

What role does the Gambling Commission play?
It is the UK regulator responsible for overseeing licensed gambling operators and enforcing rules.

What could happen if the black market grows?
It could reduce tax revenues, weaken consumer protections and undermine the regulated sector.