Illegal gambling surge, concerns over tax increases dominate BGC's Annual General Meeting

Concerns over the expansion of unlicensed gambling in Britain have intensified, with industry estimates indicating that 1.5 million people are already using illegal platforms and wagering around £10 billion ($13.3 billion) annually outside regulation.

The issue dominated discussions at the Betting and Gaming Council’s Annual General Meeting, where policymakers and industry stakeholders examined the impact of recent tax measures and proposed regulatory changes. 

Among the key concerns were Financial Risk Assessments, which would require customers to submit detailed financial information such as bank statements, a move the sector says could potentially push users toward unregulated operators.

Baroness Fiona Twycross, Parliamentary Under Secretary of State and Minister for Gambling, acknowledged that duty changes introduced in the November Budget are placing pressure on the sector, particularly online operators, while maintaining that they are necessary to support public finances and are expected to generate more than £1 billion ($1.33 billion) annually. 

She warned that “illegal gambling causes harm to vulnerable consumers” and confirmed £26 million ($34.53 billion) in additional funding for the Gambling Commission alongside the creation of an Illegal Gambling Taskforce. The initiative will involve technology firms, payment providers, and law enforcement agencies, with further consultation planned on banning unlicensed sports sponsorships.

Industry participants argued that enforcement measures risk being undermined by tax policy. BGC Chief Executive Grainne Hurst warned that the sector is approaching a tipping point, comparing it to a structure that could eventually collapse under sustained pressure. 

Data presented at the meeting suggested that illegal operators may now account for 10% to 12% of gambling activity in Britain, a sharp increase from around 0.5% five years ago.

Regulators also acknowledged the growing challenge. Ian Angus of the Gambling Commission said, “The threat of the illegal market is higher than it was previously. We do expect illegal gambling to grow as a result of the Budget,” while noting that enforcement efforts cannot succeed without greater involvement from technology companies.

Economic pressures on licensed operators were highlighted by David Williams of Rank Group, who said increased taxes would significantly raise costs and force operational changes, including staffing decisions. Simon Zinger of Entain described enforcement funding as insufficient relative to the resources available to illegal operators.

Polling presented at the event indicated changing consumer sentiment, with 52% of bettors believing higher taxes will drive users toward unlicensed platforms, while 57% consider current regulations already excessive. Younger users appear particularly exposed, with more than one in five adults aged 18 to 24 reportedly accessing illegal sites, often through messaging platforms.

Hurst also pointed to the ease of accessing such platforms online and criticized government projections that policy changes could divert an additional £500 million ($663.95 million) into the black market.

Shadow Culture Secretary Nigel Huddleston warned that tightening regulation and taxation simultaneously risks making the licensed market less competitive, driving consumers toward illegal alternatives.

The Gambling Commission signaled further action, including exploring regulated cryptocurrency payments to reduce reliance on channels linked to illegal gambling. Officials also emphasized the need for policy stability to avoid continuous regulatory changes that may unintentionally accelerate market displacement.

Industry data cited at the meeting showed the regulated sector supports over 109,000 jobs, contributes £6.8 billion to the economy, and generates £4 billion ($5.3 billion) in annual tax revenue, while problem gambling rates remain at 0.7% according to NHS surveys.

Hurst reiterated the urgency of the issue, stating that the illegal market is expanding in scale and sophistication and requires coordinated action to prevent further growth.