Growth of the Online Market Outside the UK Linked to Tax Increase

The online gambling market outside the United Kingdom is projected to expand following the increase in Remote Gambling Duty (RGD), according to an analysis by H2 Gambling Capital. This report shows a significant increase in unregulated gambling activity. It is estimated that gross gaming yield (GGY) outside the UK increased from approximately £200 million in 2019 to £685 million in 2025. During the same period, it is anticipated that offshore turnover will grow from around £5 billion to £16.6 billion. Between 2023 and 2025, these figures nearly double.

Growth Forecast for GGY Outside the UK

H2 Gambling Capital bases its estimate on web traffic analysis, adjusting for bounce rates, time on sites, and a "spending coefficient" reflecting high-value customers attracted by offshore brands. For the UK market, H2 uses a spending multiple of 2.0x for offshore visitors compared to those within the country, which explains why licensed sites capture 96% of web visits but only 92% of spending.

Looking forward, GGY outside the UK is expected to reach nearly £1.4 billion by 2031, registering a compound annual growth rate (CAGR) of 12.7% from 2025. Offshore turnover is projected to grow to approximately £36 billion by 2031.

Impact of the Increase in Remote Gambling Duty

A key factor behind the market's expansion outside the UK has been the increase in RGD since April 2026. H2 described this tax increase as a "significant headwind" for domestic operators, contributing to the migration of players abroad. For online casino games, H2 reported that GGY increased by 14% to £5.70 billion in 2025. However, the GGY from online betting fell by 6% to £2.45 billion, partly due to weak retention margins, despite a 5% increase in turnover.

In 2026, iGaming GGY is forecasted to decrease marginally by 1% to £5.64 billion, reflecting residual growth from 2025, greater promotional spending by operators, and lower advertised "return-to-player" (RTP) rates in slot games. A more pronounced impact is anticipated for 2027, with a year-on-year decline in iGaming GGY of 5% to £5.39 billion.

Impact of the World Cup

H2 estimates that the effective tax increase and related factors could reduce growth by 15%-20%. On a GGY basis, considering the reduction in bonuses, the real impact could reach a decline of 20%-25% between 2026 and 2027. Online betting is expected to maintain relative resilience in 2026 thanks to the World Cup, with a projected GGY increase of 3% to £2.52 billion.

However, as the influence of the event fades and the RGD increases to 25% from April 2027, GGY is forecasted to decline to £2.47 billion in 2027. A study by TransUnion found that one in eight young adults (12%), particularly those aged 25 to 34, have fallen victim to fraud on unlicensed betting sites.

Market Reaction

In response to the report, Grainne Hurst, Chief Executive of the Betting and Gaming Council, expressed her frustration over the impact of the unregulated market: "The only winners from these tax increases will be criminal operators abroad. The UK will lose jobs, investment, and tax revenue, while consumers are pushed towards operators that do not provide protections from the regulated market."

On the other hand, by 2031, national activity is still projected to account for the largest portion of the UK GGY, with around £8.2 billion of a total £9.6 billion.