Growth of the UK Offshore Online Market Linked to Tax Increases
H2 Gambling Capital analysis shows that an increase in Remote Gaming Duty leads to a rise in offshore gaming revenue.
According to H2 Gambling Capital, the offshore online gambling sector in the United Kingdom is likely to expand amid the increase in Remote Gaming Duty (RGD). The latest H2 models indicate that activity in offshore gambling has significantly increased. It is projected that the offshore gross gaming yield (GGY), a key measure of operators' revenues after paying out to players, will rise from £200 million in 2019 to £685 million by 2025. During the same period, the turnover of offshore operations is expected to grow from approximately £5 billion to £16.6 billion, doubling between 2023 and 2025.
Forecast for Offshore Sector Growth
H2's modeling is based on an analysis of internet traffic, taking into account a spend multiplier that reflects trends of players choosing offshore brands. For the UK market, a multiplier of 2.0x is used for offshore visitors. This explains why licensed sites attract around 96% of visits but only about 92% of total spend. By 2031, offshore GGY is expected to reach around £1.4 billion, showing a compound annual growth rate (CAGR) of 12.7% from 2025. The turnover of offshore operators could rise to £36 billion.
Impact of RGD Increases
A key factor in the growth of the offshore market has been the increase in RGD effective from April 2026. This tax measure has become a “significant barrier” for licensed operators, contributing to the shift of players to offshore sites. In 2025, GGY for online casinos increased by 14% to £5.70 billion; however, revenues from online betting decreased by 6% to £2.45 billion due to weak betting margins, despite a 5% increase in turnover.
Impact of the World Cup
H2 Gambling Capital estimates that after the tax increases, growth may reduce by 15%-20%. Considering reduced bonuses, the actual decline may amount to 20%-25% in 2026-27. Online betting may maintain relative stability in 2026 due to the World Cup, with GGY growing by 3% to £2.52 billion.
Market Reaction
Grain Hurst, Chief Executive of the Betting and Gaming Council, expressed concern about the impact of the unregulated market, stating: "The only winners from increased taxes will be criminal foreign operators. The UK will lose jobs, investment, and tax revenues, and consumers will be put at risk."
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Татьяна Грекова
Regulatory Affairs Correspondent
Татьяна Грекова tracks gambling legislation, licensing, and enforcement — from the UKGC, MGA, and Germany's GGL to Spain's DGOJ and the regulatory maps of the CIS and the Americas. The reports answer three questions precisely — what changed, where, and who it affects — with jurisdictions, effective dates, and penalty figures exactly as published. Compliance teams read Татьяна Грекова to catch a rulebook moving before their next board meeting.
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