UK offshore gambling revenue set to double amid duty rises by 2031

The share of UK online gambling revenue generated offshore could almost double by 2031. This comes as tax rises place growing pressure on licensed operators, according to H2 Gambling Capital. Its latest modelling forecasts offshore gross gaming yield (GGY) climbing from £685m in 2025 to £1.4bn within six years. The report also expects the licensed market’s share of online GGY to fall to 85%, raising fresh questions about the effect of higher duties on channelisation.

Offshore market has grown rapidly

The H2 Gambling Capital report estimates that offshore GGY has more than tripled since 2019, when it stood at around £200m. Offshore turnover rose from approximately £5bn to £16.6bn over the same period. Both measures roughly doubled between 2023 and 2025.

H2 expects this growth to continue. It forecasts offshore turnover of approximately £36bn in 2031. Meanwhile, licensed operators’ share of GGY is predicted to decline from 92% in 2025 to 85%. Their share of turnover could fall more sharply, from 90% to 78%.

The estimates are based on bottom-up web traffic analysis, adjusted for bounce rates and time spent on gambling sites. H2 also applies a 2.0x spending coefficient to offshore customers, reflecting its assumption that higher-value players are more likely to use unlicensed brands.

This explains why licensed operators account for around 96% of visits but an estimated 92% of customer spending.

Tax changes increase pressure on licensed operators

The most immediate pressure comes from the increase in Remote Gaming Duty from 21% to 40%. This took effect on 1 April 2026 and applies to products such as online slots and casino games.

A separate 25% remote betting rate will be introduced within General Betting Duty from April 2027. This will replace the current 15% rate for most online betting. Remote bets on UK horseracing will remain at 15%, as confirmed in the government’s gambling duty policy.

H2 expects licensed iGaming GGY to decline by 1% to £5.64bn in 2026 before falling a further 5% to £5.39bn in 2027. Across the two years, that represents a nominal decline of 6% and an estimated real-terms reduction of 11%.

The slower decline forecast for 2026 reflects strong growth during 2025, continued promotional spending and operators reducing advertised return-to-player rates rather than immediately withdrawing offers.

World Cup provides temporary betting boost

Online betting was expected to prove more resilient during 2026. GGY was forecast to increase by 3% to £2.52bn. H2 attributes some of that growth to increased activity around the 2026 World Cup.

However, the benefit is expected to fade during 2027, when betting GGY is forecast to fall to £2.47bn as the tournament effect reverses and the new remote betting tax rate takes effect.

Total UK online GGY, including licensed and offshore activity, is projected to rise from £8.8bn in 2025 to £9.6bn by 2031. Although that represents nominal annual growth of 1.4%, H2 calculates that the market will contract by around 12% in real terms.

BGC warns of offshore advantage

Betting and Gaming Council chief executive Grainne Hurst said higher taxes risk giving offshore businesses a competitive advantage over operators complying with British licensing, tax and player-protection requirements.

“Britain will lose jobs, investment and tax revenue, while consumers are pushed towards operators offering none of the protections found in the regulated market.” - Grainne Hurst

However, the figures remain forecasts rather than evidence that the latest duty increase caused the offshore growth recorded since 2019. H2’s warning is forward-looking: it expects higher taxes, combined with lower returns and fewer promotions from licensed operators, to accelerate a migration that its modelling suggests was already under way.