Key Moments:
- PwC identified a correlation between higher gambling taxes and increased black-market activity in European countries.
- Jurisdictions with tax rates below 25% reported stronger growth in gaming tax receipts between 2019 and 2024.
- The UK’s offshore gambling market share rose from 3.3% in 2021 to 5%, representing significant unregulated activity.
Findings on Taxation and Black-Market Growth
A new study by PwC has drawn attention to the unintended consequences of increasing gambling taxes and regulations in Europe. The report, highlighted by the UK Betting and Gaming Council (BGC), found that countries with stringent regulatory and tax measures face significantly higher levels of black-market gambling. Market shares for unregulated gambling stand at 57% in France, 35% in Sweden, and 37% in the Netherlands. In contrast, Spain and Denmark, which apply more moderate tax rates, have black-market shares of only 11%. PwC also reported that the UK’s offshore gambling market share reached 5%, up from 3.3% in 2021, indicating substantial untaxed and unregulated activity.
| Country | Black-Market Share (%) |
|---|---|
| France | 57 |
| Sweden | 35 |
| Netherlands | 37 |
| Spain | 11 |
| Denmark | 11 |
| United Kingdom (offshore share) | 5 |
Tax Rates and Revenue Implications
According to the PwC report, raising gambling taxes does not automatically lead to increased public revenue. Between 2019 and 2024, regions with tax rates below 25% experienced better growth in tax receipts than those with higher rates. PwC observed that heightened taxation tends to limit operators’ marketing and promotional activities, making regulated markets less attractive and potentially driving consumers to unregulated platforms. The report concluded that over-taxation not only reduces tax efficiency but also threatens player protection and the long-term viability of legal gaming operators.
Industry Concerns and Calls for Balanced Policy
PwC’s research suggests that markets with lower tax burdens and lighter regulations see more robust growth in legal gaming, whereas stricter environments experience a contraction in regulated market presence. The BGC and PwC have cautioned that increasing the UK’s gaming tax could harm the economy, failing to deliver the anticipated financial or social benefits.
Grainne Hurst, BGC CEO, highlighted the risks:
“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.”
Based on the findings, Hurst is urging UK regulators and policymakers to maintain fair taxation and balanced regulatory measures. The BGC’s position is that this approach is essential for safeguarding the health and competitiveness of Britain’s gambling sector, upholding player protection, supporting the wider economy, and ensuring legitimate operators are not disadvantaged compared to unregulated outlets.
- Author
Daniel Williams
