Why UK Gambling Tax Changes Risk Driving Players Away From Regulated Sites

Over the years, I have learned a lot by watching the gambling industry develop in the UK: regulation is only effective when it mirrors actual behaviour.

I have no doubt that stricter regulatory frameworks or higher taxes do not decrease gambling activity; they simply shift it to alternative channels, often with the potential for negative social impact.

The Betting and Gaming Council's recent report is a cause for concern. 

I have increasingly been worried that if we continue to put more and more pressure on the regulated market, players will start looking for other ways to play, and if this happens, all of the protections in place in this country would no longer work.

Many consider the UK to have a highly developed gambling regulatory system. 

Because of this strong regulatory framework, licensed operators are subject to rigorous requirements for safer gambling, identity verification and consumer protection. 

However, once players step outside this system, many of the regulatory body's protective measures will no longer apply.

The Black Market Isn’t A Fiction - It’s Growing

The report provides a clear indication of how large a share of the UK Gambling Market is handled by unregulated operators, with an estimated 5% of all online gambling for UK players occurring on unlicensed sites.

This suggests that the gambling industry is already losing some customers from regulated to unregulated operators due to the regulatory burden imposed by government oversight.

I do not think this change can be attributed to a single policy decision. 

In fact, the trend towards unregulated gambling sites is driven by cumulative pressure from higher taxes, increased regulation, and friction within the regulated experience, including ongoing debate around UK gambling tax policy.

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As a result of these influences on operators, they have decreased odds, cut back on bonuses and reduced their marketing. 

None of the individual changes has had a significant impact on its own, but collectively they have significantly reduced the attractiveness of regulated gambling to players.

At the same time, unregulated operators are enhancing their offers with fewer restrictions and more attractive promotional incentives. 

For many regular gamblers, it's hard to ignore.

Why Regulation Matters For Safety And Trust

The main aim of regulation is to protect players; therefore, keeping players in the regulated market should be a priority.

Players in a regulated system can access a number of protective measures, such as mandatory age verification and identity verification checks, self-exclusion through GAMSTOP, safer gambling tools, independently tested games and clear routes to resolve disputes. 

Outside that system, those protections disappear.

Seeing the development of other EU-based markets, tightening regulations and the struggle with increased offshore activity makes it clear that the UK is heading in the same direction, and believing we will not end up with the same results would be misguided, to say the least.

Why Discovery Platforms Play A Bigger Role Than People Realise

Part of this story is how players find online betting sites, and I think it’s something that gets overlooked far too often.

Sites like Gambling.com provide a gateway to UK-licensed operators that meet all necessary regulations, reducing the risk that punters will encounter at unlicensed or illegal operators they might stumble upon by accident.

Directing players to safe, regulated operators is important and will steer them away from illegal gambling. 

The focus of these sites is not on encouraging gambling, but on providing a method for those who want to gamble to do so in a secure and properly regulated environment.

Players Still Care About Value

One thing I’ve learned is that regulation doesn't eliminate price sensitivity. People will always be influenced by odds, RTP, bonuses, and ease of payment, and these factors will drive behaviour across every market, including those that are heavily regulated.

The higher taxes on licensed operators — and wider discussions around UK gambling taxes — mean they can't compete as well in the marketplace, allowing unlicensed operators to increase their market share without providing anywhere near the same level of protection as regulated operators.

This pressure is not limited to betting alone. The same dynamics apply to regulated online casinos, where tighter margins and increased compliance costs can make it harder for licensed platforms to match the offers available elsewhere.

Why This Matters Now

The UK Government’s 2025 review of gambling tax laws marked a critical moment, one that has already influenced where players choose to gamble and will continue to do so for years ahead.

With potential changes to gambling duty in the UK, the risk is that further pressure could unintentionally accelerate the movement away from the licensed sector.

Once a player has established patterns of play outside the regulated environment, it is very hard to bring them back. That is when regulators lose visibility, consumer protection declines, and tax receipts fall; that is not an outcome anyone wants, myself included.

A More Balanced Way Forward

Regulatory reform in the UK is needed to strengthen the licensed market; therefore, stronger, consistent, and effective regulation will support its continued existence. Regulated, actively monitored, and trustworthy platforms will help make this system work.

Success, for me, is measured by how many people have remained in the regulated world and been directed toward licensed operators rather than unregulated alternatives.

If regulation does not direct players out of the shadows, it cannot successfully fulfil its primary function.