H2GC Forecasts UK Offshore Gambling Stakes Reaching £36bn by 2031 as Remote Gaming Duty Hits 40%

Key Takeaways

• Offshore Stakes Growth: H2GC projects UK offshore turnover rising from £16.6bn in 2025 to £36bn by 2031.
• GGY Figures: Offshore gross gaming yield forecast to increase from £685m in 2025 to £1.4bn by 2031.
• Channelisation Decline: Onshore GGY channelisation has fallen from 97% in 2019 to 92% in 2025 and is projected to reach 85% by 2031.
• Tax Policy Driver: Remote gaming duty increase to 40% from 1 April 2026 and remote betting duty to 25% from 1 April 2027 identified as accelerators.

‘ The Chancellor’s tax hikes are handing illegal gambling operators a competitive advantage. The only winners from these tax hikes will be criminal operators based overseas. Britain will lose jobs, investment and tax revenue, while consumers are pushed towards operators offering none of the protections found in the regulated market. ’

That is Grainne Hurst, Chief Executive of the Betting and Gaming Council, commenting on the H2 Gambling Capital report prepared for the BGC. The analysis, as reported by European Gaming, maps a structural shift in the UK market where offshore activity is expanding even as total online GGY growth stalls.

Turnover and Revenue Tell Different Stories

Public focus has landed on the headline offshore stakes number. H2GC puts that figure at £16.6bn for 2025, up from around £5bn in 2019, and forecasts it doubling to £36bn by 2031. Those are amounts wagered with unlicensed operators.

The revenue picture is more contained. Offshore GGY stands at £685m in 2025, up from £200m in 2019, and is projected to reach £1.4bn by 2031. Both metrics grow at a similar compound rate near 13 percent, yet the gap underscores that offshore operators capture far less in actual yield than the turnover headline suggests.

Total UK online GGY, onshore plus offshore, is expected to rise only marginally from £8.8bn in 2025 to £9.6bn in 2031. H2GC describes this as a real-terms decline after inflation.

Tax Increases as the Central Catalyst

H2GC ties the accelerating offshore migration directly to tax policy. Remote gaming duty rose from 21 percent to 40 percent on 1 April 2026. Remote betting duty climbs to 25 percent on 1 April 2027.

Onshore iGaming GGY is forecast to dip 1 percent in 2026 to £5.64bn as operators adjust promotions and return-to-player settings. The steeper decline arrives in 2027 with a further 5 percent drop to £5.39bn. Combined, the nominal decline reaches 6 percent, closer to 11 percent in real terms. Factoring in underlying market growth, the effective tax headwind falls between 15 and 20 percent.

Online betting GGY receives a temporary World Cup lift, rising 3 percent in 2026 to £2.52bn before retreating to £2.47bn in 2027 once the higher duty takes hold.

Eroding Onshore Channelisation Rates

Onshore GGY channelisation, the share of UK gambling activity staying with licensed operators on a GGY basis, has fallen from 97% in 2019 to 92% in 2025 and is projected to reach 85% by 2031.

On a turnover basis, the 2025 onshore share is 90 percent, forecast to reach 78 percent by 2031.

This erosion represents lost revenue, jobs, and tax receipts for the licensed sector. It also funnels players toward environments lacking the licensing safeguards that define the regulated market.

How H2GC Constructs Its Offshore Estimates

The report employs a bottom-up methodology rather than top-down econometrics. It combines web audits of UK-facing sites, affiliate referrals, SEO keyword analysis, and bespoke traffic studies adjusted for bounce rates and time on site.

For 2025 that traffic work allocates 96.0 percent of customer activity to licensed sites and 4.0 percent to unlicensed ones. Applying a 2x spending multiplier for offshore customers converts the activity split into a 92.3 percent licensed share of GGY. H2GC notes its multiplier range runs from 1x to 3x depending on jurisdiction.

One dimension the coverage underemphasizes is the competitive response available to licensed operators. Product innovation, improved customer experience, and targeted responsible-gaming tools could narrow the leakage if tax policy does not render compliance untenable.

A Cautionary Tale for US States, Tribes, and LATAM Regulators

The UK experience offers a live case study in how aggressive taxation can accelerate channelisation loss and offshore leakage. US state and tribal governments weighing tax structures on sports betting or iGaming should note the pattern: push rates too high and the marginal player migrates to unregulated sites that pay no local tax and offer no consumer protections.

The same logic applies to LATAM markets finalizing frameworks in Brazil, Mexico, and beyond. A 40 percent or higher effective rate may look attractive on paper, yet the H2GC numbers show it can shrink the taxable base faster than the rate itself rises. Regulators there would do well to target the 13-15 percent range that has sustained channelisation in mature US jurisdictions rather than testing the upper limits.

For operators and investors, the inflection point is clear. Sustainable growth requires tax policy that balances revenue needs with market incentives. Excessive duties do not eliminate demand; they simply redirect it. Client-partners across these regions should model channelisation scenarios now, because the UK trajectory demonstrates how quickly licensed share can slip from 92 percent to the mid-80s once the offshore incentive becomes structural.

The question is not whether taxation affects behavior. It is whether policymakers absorb the lesson before the leakage becomes permanent.