BGC shares report linking higher gambling taxes to black market growth across Europe

European countries that impose higher taxes and stricter regulations on betting and gaming are seeing more gamblers turn to the black market, according to a new PwC report released by the UK's Betting and Gaming Council (BGC).

The study, Impact of the Taxation and Regulatory Environment on European Online Betting and Gaming Markets, shows that restrictive regimes directly contribute to offshore gambling growth.

France, Sweden, and the Netherlands have some of the highest black-market shares — 57%, 35%, and 37%, respectively. In contrast, Spain and Denmark, which maintain moderate tax rates and open licensing systems, keep most gambling within the regulated market, with only about 11% of activity offshore.

In the UK, the report estimates that around 5% of all online betting and gaming now occurs on unlicensed black-market sites, representing hundreds of millions of pounds in untaxed and unregulated activity. This marks a sharp increase from 2021, when the black market accounted for 3.3% of total online gambling spend.

The report concluded that higher effective tax rates and tighter rules consistently lead to smaller regulated markets, while jurisdictions with balanced taxation and open licensing enjoy stronger growth and higher overall tax receipts.

Contrary to the assumption that raising gambling duties boosts government income, the report highlights that between 2019 and 2024, countries with tax rates below 25% of gross gaming revenue saw average annual tax revenue growth of 13%, compared with 9% in higher-tax regimes.

Operators in heavily taxed markets tend to cut back on marketing, bonuses, and customer incentives, making licensed platforms less competitive and driving players toward unregulated alternatives.

The findings come as the UK Treasury prepares its Autumn Budget, amid reports that changes to remote betting and gaming duties are under consideration.

While Britain remains one of the safest and most tightly regulated gambling markets in the world, the report warns that further tax increases could risk driving more players toward the black market.

“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,” Grainne Hurst, CEO of the Betting and Gaming Council, said.

“Well-balanced regulation and fair taxes protect players, raise more revenue for the Treasury, and support thousands of jobs," she added. "Unlicensed operators do none of those things.”