The study, “Impact of the Taxation and Regulatory Environment on European Online Betting and Gaming Markets,” draws direct connections between restrictive policy regimes across Europe and offshore gambling growth.
France, Sweden, Netherlands Show Highest Black Market Activity
France leads with 57% of its gambling market operating in the black market, followed by Sweden at 35% and the Netherlands at 37%. These jurisdictions have implemented higher tax burdens and tighter regulatory frameworks, which the report suggests directly contributes to players seeking unlicensed alternatives.
By contrast, Spain and Denmark maintain moderate tax rates and open licensing systems, keeping approximately 89% of gambling activity within regulated channels. Only around 11% of gambling in these markets takes place outside the licensed sector.
UK Black Market Doubles Since 2021
The report reveals that approximately 5% of all online betting and gaming in the UK now occurs on unlicensed black market websites, representing hundreds of millions of pounds in untaxed and unregulated activity. This marks a significant increase from 2021, when the black market accounted for 3.3% of total online gambling spend.
The findings arrive as the UK Treasury prepares its Autumn Budget, with reports suggesting potential changes to remote betting and gaming duties are under consideration.
Tax Revenue Growth Stronger in Lower-Tax Markets
The analysis challenges the assumption that increasing gambling duties automatically boosts government revenue. Between 2019 and 2024, countries with tax rates below 25% of gross gaming revenue recorded average annual tax revenue growth of 13%, compared to 9% in higher-tax jurisdictions.
The report explains that operators facing steeper tax burdens typically reduce marketing expenditure, bonuses, and customer promotions. This makes licensed platforms less competitive against unregulated alternatives, driving players toward offshore operators that offer better value propositions.
Industry Warns Against Tax Increases
“Britain has one of the safest gambling markets in Europe, but if the Treasury isn’t careful, we could quickly end up like France or Sweden, with huge black markets contributing nothing in tax, offering zero player protection, and providing no funding for sport or the economy,” said Grainne Hurst, CEO of the Betting and Gaming Council.
“Well-balanced regulation and fair taxes protect players, raise more revenue for the Treasury, and support thousands of jobs,” Hurst added. “Unlicensed operators do none of those things.”
The report concludes that higher effective tax rates and tighter regulations consistently lead to smaller regulated markets, while jurisdictions that maintain balanced taxation and open licensing frameworks experience stronger market growth and higher overall tax receipts.
While Britain remains one of the most tightly regulated gambling markets in the world, the research warns that additional tax increases could risk pushing more players toward unregulated operators, potentially undermining both player protection measures and tax revenue objectives.
Source: Betting and Gaming Council
