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UK Gambling Tax Rise May Cut Licensed Market Share by 2031

UK Gambling Tax Increase Could Reduce Licensed Market Share to 78% by 2031 – Offshore Sites Projected to Gain Turnover

Key Takeaways

• H2 Gambling Capital expects offshore gambling turnover to rise from £16.6 billion in 2025 to about £36 billion by 2031.
• Offshore gross gaming yield is projected to increase from £685 million to £1.4 billion over the same period.
• Licensed operators held around 92% of online gambling revenue in 2025, but that share could fall to 85% by 2031.
• Measured by turnover, the licensed share may decline from 90% to 78% by 2031.
• 12% of young adults report having experienced fraud through an unlicensed betting site, according to TransUnion.

Tax Changes Expected to Shift Market Share Toward Offshore Operators

Higher UK gambling taxes are expected to alter the competitive balance between licensed operators and offshore sites. According to H2 Gambling Capital, the increase in Remote Gaming Duty represents a significant headwind for regulated companies and could contribute to a measurable shift in market share over the coming years.

H2 forecasts that offshore gambling turnover will more than double from £16.6 billion in 2025 to approximately £36 billion by 2031. Over the same period, offshore gross gaming yield is projected to grow from £685 million to £1.4 billion.

In contrast, licensed operators are expected to lose ground. In 2025, they accounted for around 92% of online gambling revenue. By 2031, that figure could fall to 85%. When measured by turnover rather than revenue, the licensed market share could decline from 90% to 78%.

For users comparing regulated and offshore platforms, these projections indicate that a larger portion of overall gambling activity may take place outside the UK licensing framework if the forecasts materialize.

Remote Gaming Duty Cited as Central Factor

H2 identifies the increase in Remote Gaming Duty as a core driver behind its projections. The firm describes the tax rise as a significant challenge for licensed operators. Higher tax burdens can affect how regulated platforms structure bonuses and player incentives, potentially reducing promotional offers and overall player value.

According to H2, weaker bonuses and lower player value in the regulated market could benefit offshore brands that are not subject to the same tax structure. The analysis suggests that pricing and promotional competitiveness may play a role in channeling some players toward offshore sites.

The Betting and Gaming Council has also commented on the expected effects of the tax changes. Chief Executive Grainne Hurst stated that the only beneficiaries of the higher taxes would be criminal operators based overseas, arguing that Britain could lose jobs, investment, and tax revenue while consumers move to operators that do not offer the protections found in the regulated market.

Revenue Outlook for Online Casino and Betting Segments

Beyond overall market share, H2 provides projections for specific segments of the UK gambling market. Online casino revenue is expected to decline to £5.64 billion in 2026 and further to £5.39 billion in 2027.

In the betting segment, revenue may receive temporary support from the World Cup. However, H2 forecasts that betting revenue will fall to £2.47 billion in 2027 after that short term effect.

These figures indicate that both casino and betting verticals could face pressure in the regulated environment in the coming years, particularly if tax changes affect operator margins and consumer incentives.

Methodology Behind Offshore Market Estimates

H2 states that its offshore estimates are based on a model incorporating web traffic data, bounce rates, time spent on sites, and customer value metrics. The firm assumes that offshore visitors spend twice as much as visitors to licensed sites.

This assumption plays a key role in projecting both turnover and gross gaming yield growth for offshore operators. The methodology suggests that user behavior data, rather than solely reported financial figures, informs the forecast of market expansion outside the regulated system.

For readers evaluating platform options, this highlights that traffic patterns and user engagement metrics are being used as indicators of future financial performance in the offshore segment.

Consumer Risk Data Highlights Fraud Exposure

While offshore growth projections point to increasing activity, consumer risk remains a documented concern. According to TransUnion, 12% of young adults reported that they had knowingly experienced fraud through an unlicensed betting site. Individuals aged 25 to 34 were identified as the most affected group.

This data underscores the difference between licensed operators, which operate under UK regulatory oversight, and unlicensed platforms that may not provide equivalent consumer protections. For users, the distinction between regulated and unregulated environments can have practical implications in cases of disputes or fraud.

Our Assessment

The projections from H2 Gambling Capital indicate that higher UK gambling taxes, particularly the increase in Remote Gaming Duty, could reduce the licensed sector’s share of both revenue and turnover by 2031 while offshore activity expands. Forecast declines in online casino and betting revenue add to the pressure on regulated operators. At the same time, consumer data from TransUnion shows measurable fraud exposure among users of unlicensed sites. Together, these figures outline a potential shift in market structure with implications for operator competitiveness and user risk.