The Budget has put Britain’s world-leading betting industry on the brink

As 2026 begins, the UK’s betting and gaming industry finds itself at a crossroads. Not because of market failure, but because of political choice.

Regulated betting and gaming is one of the UK’s few globally successful sectors, supporting jobs, investment and innovation while operating under some of the most robust consumer protection standards in the world. That success is now being put at risk by tax changes announced in the Budget, which threaten to distort consumer behaviour and drive customers out of the regulated market and into the arms of the harmful illegal black market.

The Treasury’s decision to hike taxes on online betting and gaming is not just short-sighted but dangerous, particularly given the scale of regulatory reform the sector is already delivering in good faith. Those reforms were designed to protect consumers within a safe, regulated market. Piling significant new taxes, on top risks achieving the opposite, driving customers away from regulated operators and towards the black market.

It reflects a growing tendency by this Government to “tax fun”, singling out lawful leisure activities as an easy revenue raiser while ignoring the impact on consumer behaviour.

This is an industry that currently contributes £6.8bn to the UK economy, supports 109,000 jobs, pays £4bn in tax and underpins large parts of British sport and culture. Around 22.5 million adults place a bet each month in a safe, regulated environment, with problem gambling rates at just 0.4 per cent according to recent NHS surveys. That is not an accident, it is the result of a regulatory system that has worked.

Yet the Budget has fundamentally knocked that system off balance. Operators and ultimately punters are being asked to absorb these steep tax rises.

And the consequences are now playing out.

Independent analysis from Frontier Economics shows up to 1.5 million people in Britain are already gambling on unlicensed sites, staking as much as £4.3bn a year outside UK regulation. Even the Office for Budget Responsibility warned that the tax plans will push more consumers into the black market. The Chancellor is repeating the same mistake made in parts of Europe, where excessive taxation has allowed huge growth in illegal gambling.

Once customers leave the regulated market, they are very hard to get back. Illegal operators do not carry out age checks, offer safer gambling tools, contribute to treatment or pay a penny in UK tax. They exist entirely beyond the reach of British regulators, yet government policy has put rocket boosters under their competitive advantage over regulated operators.

This is not theory, it is economic reality. If legal businesses are priced out of the market, illegal ones will fill the gap.

The irony is that this comes at the very moment the industry is delivering reform. The Gambling White Paper has strengthened an already robust regulatory framework, with BGC members investing heavily. But if tax policy drives consumers towards illegal operators, it directly increases risk by forcing people out of the regulated market and into unsafe, unprotected environments.

There is also a wider cost the Treasury seems determined to ignore. British sport depends on a healthy, regulated betting sector. From horseracing to football, darts, snooker and rugby league, BGC members provide vital funding, sponsorship and media rights, while also carrying safer gambling messages to millions of fans. With 2026 bringing the World Cup, the Commonwealth Games and the Grand National, weakening that ecosystem now is purely an act of self-harm.

A strong, well-regulated sector that helps consumers identify which operators are licensed, accountable and subject to UK protections is also essential. If that signalling is weakened, consumers are far more likely to end up on illegal sites, where no age checks, consumer protections or safer gambling tools exist. Calls by some for further restrictions on advertising would be the crowning glory for the black market preventing regulated operators from distinguishing them from illegal sites.

The choices facing ministers this year are stark. They can double down on a Treasury-led approach that prioritises short-term revenue while fuelling the growth of the black market. Or they can recognise that safer gambling, consumer protection and tax receipts all depend on a competitive, regulated sector.

Evidence, not ideology, should drive policy and the evidence is already overwhelming.

At the crossroads the Government has already headed down the wrong road. The question is whether it is prepared to turn back before lasting damage is done, or will they simply allow the black market to dictate the future of betting and gaming in the UK which will only result in harm for the consumer, the Exchequer, jobs, sports and business.

Grainne Hurst, CEO, Betting and Gaming Council