EU 1% Gambling Levy Proposal Advances Amid Shared Black-Market Concerns With US States and UK Tax Experiences

EU Budget Committee to Consider 1% Levy on Gambling Revenues

Legislators have moved a step forward to implementing an EU-wide levy on gambling revenues. A 1% levy was proposed by Romanian politician Victor Negrescu, Vice President of the European Parliament and a member of the Budget Committee, in February.

Next Wednesday, 27 May, the EU Budget Committee will hold a meeting on how such a measure could proceed. The meeting will be led by Piotr Serafin, the EU Budget Commissioner. The Socialists and Democrats (S&D) political bloc has lent its support.

Proponents argue the levy will generate additional funding for health, education and youth initiatives. Yet the specifics remain unconfirmed. The 1% levy would apply to either gambling revenues or turnover from across the 27 EU member states.

Projected Revenue and the Multiannual Financial Framework

The S&D estimates that the levy could raise between €2bn-€4bn annually, and up to between €14bn-€28bn across the EU’s seven-year budget cycle. This aligns with Brussels’ review of ways to generate funds for the proposed 2028-2034 Multiannual Financial Framework, a €2trn prospect.

Sandra Gómez López, Co-Negotiator on Own Resources for the EU Budget in the EU Budget Committee, said: “According to the S&D Group position, an ambitious basket of new genuine own resources is a condition for having an ambitious MFF that can respond to the increased needs of our citizens and business.”

She added: “As already stated in the MFF Interim Report adopted in April 2026, we need sustainable, predictable and resilient revenue streams for the Union budget.”

Victor Negrescu added: “We take up the initiative in times when Europe’s online gambling and betting market continues to expand rapidly, generating tens of billions of euros annually while increasingly operating across borders and benefitting from the single market.”

Both Sides Cite Illegal Gambling as Central Risk

Negrescu highlighted that according to industry estimates, illegal online gambling already represents around 71% of the market in Europe. This leads to major losses in public revenue, weaker consumer protection and increased risks linked to money laundering and organised crime.

The European Gaming and Betting Association (EGBA) has been critical of the proposal. Maaten Haijer, Secretary General of the EGBA, described the levy as “unworkable” when it was first touted back in February.

The EGBA and other trade bodies argue that taxing gambling could lead to operators taking mitigating measures which would push customers to illegal companies. This mirrors arguments made by the UK’s Betting and Gaming Council (BGC) during taxation discussions last year.

A YieldSec report cited by the European Casino Association (ECA) states the EU black market is costing some €20bn in tax money annually. The EGBA made a similar claim in July last year.

Lessons From US State Tax Hikes and UK Regulatory Outcomes

This EU conversation echoes tax-hike outcomes already observed in US states and the UK. In several US jurisdictions, aggressive tax increases on sports betting and iGaming have accelerated operator relocation or reduced compliance incentives. Illinois’ per-bet fee structure, for example, created structural friction that altered market participation.

Brazil’s proposed 18% GGR tax – a 50% jump from earlier expectations – has similarly raised concerns that operators may shift focus or see players migrate to gray markets. The pattern is consistent: when tax burdens rise sharply without corresponding enforcement against illegal operators, legal channels lose share.

The UK experience with remote gaming duty adjustments demonstrated parallel dynamics. Operators responded with cost controls, reduced marketing, and in some cases market exits or consolidation. Consumer migration to unregulated sites increased where perceived value declined.

These precedents underscore a limitation in the EU proposal. While the 1% levy appears modest on paper, its application across 27 member states with divergent enforcement capabilities could amplify black-market incentives rather than curb them.

Operational, Strategic and Competitive Implications

For operators, the levy introduces new compliance risks at a time of cross-border expansion. Client-partners already navigate varying national regimes. An EU-wide measure, even at 1%, would require harmonized reporting and could alter margins in already competitive markets.

Strategically, the proposal highlights an inflection point. The industry’s rapid growth across borders is real, yet the 71% illegal share cited by Negrescu reveals enforcement gaps that a revenue levy alone may not close. Competitive pressure from unregulated operators could intensify if legal players absorb the cost.

The shared emphasis on illegal gambling by both proponents and the EGBA creates a narrow path for dialogue. Any final framework must address the €20bn annual tax leakage identified by the ECA and EGBA. Without parallel measures to strengthen consumer protection and enforcement, the levy risks becoming another structural shift that favors gray markets.

The Bottom Line

The EU Budget Committee’s 27 May meeting on Victor Negrescu’s 1% gambling levy proposal reflects genuine fiscal pressure within the €2trn Multiannual Financial Framework. Yet the black-market risks articulated by the S&D, Negrescu, the EGBA and parallel trade bodies align closely with outcomes seen in US states and the UK after tax hikes. Operators have responded with mitigation steps that sometimes accelerate customer migration to illegal channels, producing the very revenue losses policymakers seek to avoid. A measured approach that pairs any levy with meaningful enforcement against the 71% illegal share and €20bn annual leakage offers the more constructive route. SCCG Management continues to advise client-partners on navigating these regulatory inflection points across jurisdictions.