UK unlicensed gambling stakes are projected to more than double from £17bn in 2025 to over £33bn by 2028, reaching 19.2% of total online betting and gaming activity in Britain, according to analysis by H2 Gambling Capital published by the Betting and Gaming Council.
The forecasts arrive as the UK Gambling Commission prepares to review financial risk assessment proposals at its Board meeting on 21 May, giving the channelisation data immediate policy relevance.
The Black Market Trajectory
The H2 Gambling Capital projections show unlicensed stakes nearly doubling over three years. At 19.2% of total online stakes, the black market would account for close to one pound in every five wagered online in the UK by 2028.
The BGC’s argument is direct: regulatory friction — affordability checks, higher taxes, tighter marketing restrictions — reduces the competitive advantage of licensed operators relative to offshore platforms that carry none of those obligations. Consumers who encounter friction in the regulated market do not stop gambling; they migrate.
The UKGC published its own assessment of the illegal online gambling market in late 2025, acknowledging the scale of unlicensed activity as a structural concern. The new H2 projections suggest the problem is set to deepen rather than stabilise.
UK Gambling Market 2025: UKGC Revenue Data, Tax Breakdown and Online Operator Traffic
Economic Case for Licensed Operators
The BGC framed the projections against the wider economic contribution of the regulated sector. Licensed betting and gaming businesses support 109,000 jobs in the UK, contribute £6.8bn to the economy annually and generate £4bn in tax revenue. Unlicensed operators contribute none of those figures, sit outside UK safer gambling requirements and offer no equivalent player protection obligations.
The NHS Health Survey for England estimated that 0.7% of the adult population meet the definition of problem gamblers. Around 22.5 million adults in Britain participate in some form of betting or gaming each month — a figure that illustrates the scale of the consumer base at stake in any channelisation shift.
A Familiar Tension Across Regulated Markets
The UK debate over compliance standards and black market growth reflects a dynamic visible elsewhere in Europe. In the Netherlands, the Dutch GGR channelisation rate fell below 50% in the first half of 2025, with stricter post-legalisation requirements cited as a contributing factor. German industry groups have raised parallel concerns about offshore migration as domestic regulation tightens.
The UK’s position is complicated by a substantial tax increase confirmed last year. Online casino remote gaming duty will rise to 40% and sports betting to 25%, adding to cost pressure on licensed operators and, in the BGC’s framing, widening the cost differential with unlicensed alternatives.
Hurst: A Warning for Policymakers
BGC Chief Executive Grainne Hurst said the projections constituted a direct warning for regulators and ministers.
“These forecasts are a wake-up call. The black market is not a distant threat, it is growing fast, becoming more visible, and attracting billions of pounds in stakes from British customers.
“By 2028, almost one in five pounds staked online could be with illegal operators. These sites pay no UK tax, support no British jobs, and offer none of the protections that exist in the regulated sector.
“The lesson for policymakers is clear. If the regulated market is made less competitive through higher taxes or intrusive checks, customers will not stop betting, they will simply move to the black market.
“As the Gambling Commission considers financial risk assessments, it is vital that any checks are genuinely frictionless and targeted. Any policy that unintentionally drives even more customers towards illegal operators will undermine player safety and damage the regulated sector.
“That is why ministers and regulators must avoid measures that hand an advantage to the black market.”
UKGC Board Meeting: 21 May
The Gambling Commission’s review of financial risk assessment proposals at the 21 May Board meeting is the immediate policy flashpoint. The BGC’s position is that any affordability measures must be frictionless and precisely targeted to avoid compounding the channelisation problem the H2 data describes. The Commission has not indicated when a final position on financial risk assessments will be confirmed.
Source: Betting and Gaming Council / H2 Gambling Capital
