The UK’s offshore online gambling market is forecast to expand significantly through 2031 as higher gambling taxes place additional financial pressure on licensed operators and the share of activity retained within the regulated market declines.
Market estimates show that offshore gross gaming yield (GGY), which measures operator revenue after player winnings, increased from approximately £200 million in 2019 to £685 million in 2025. Offshore turnover rose from around £5 billion to an estimated £16.6 billion over the same period, with both measures roughly doubling between 2023 and 2025.
The shift has already reduced the proportion of online gambling spending captured by UK-licensed operators. GGY channelisation fell from 97% in 2019 to an estimated 92% in 2025. Forecasts indicate that this share could decline to 85% by 2031.
Offshore GGY is projected to reach approximately £1.4 billion by 2031, representing a compound annual growth rate of 12.7% from 2025. Offshore turnover is expected to increase to around £36 billion during the same period. The underlying market analysis identifies higher Remote Gaming Duty (RGD) and changes in the economics of licensed gambling as factors expected to accelerate migration toward offshore operators.
Higher Remote Gaming Duty Changes the Market Outlook
The RGD increase to 40% from 1 April 2026 represents a “significant headwind” for licensed online gaming operators. Forecasts expect the effect to become more visible during 2027 after an initial period in which existing growth and operator spending partly offset the tax change.
Online casino GGY reached £5.70 billion in 2025, an increase of 14% year-on-year. Online betting followed a different trajectory, with GGY falling 6% to £2.45 billion despite turnover increasing by 5%. Regulatory sample data also showed a 7% reduction in active players and a 6% decline in bets placed.
For 2026, iGaming GGY is forecast to decrease by 1% to £5.64 billion. The projection reflects momentum carried over from 2025 and continued promotional spending during the initial period following the duty increase. Lower advertised return-to-player rates on slot games also form part of the expected operator response.
The effect is forecast to deepen in 2027. iGaming GGY is expected to decline another 5% year-on-year to £5.39 billion. Across 2026 and 2027, the cumulative nominal GGY decline is estimated at 6%, equivalent to approximately 11% in real terms.
The analysis calculates an effective headwind of 15% to 20% after stripping out underlying market growth. On a gross gaming revenue basis, reduced bonusing could increase the pressure further, producing an estimated real-term headwind of around 20% to 25% across the two-year period. The report’s key findings set out the 2026 and 2027 forecasts alongside the impact expected from the 40% RGD rate.
World Cup Supports Betting Before 2027 Decline
Online betting is expected to show greater resilience during 2026, with the World Cup providing a temporary boost to activity. Betting GGY is forecast to increase 3% to £2.52 billion during the year.
That support is expected to fade in 2027. Remote betting duty is scheduled to rise to 25% from 1 April 2027, and betting GGY is forecast to decrease to £2.47 billion.
Separate research cited alongside the market analysis found that 12% of young adults had knowingly fallen victim to fraud through an unlicensed betting site, with people aged 25 to 34 particularly represented in the findings.
The offshore market’s growing share also reflects differences between customer traffic and spending. The market-sizing methodology estimates that licensed operators accounted for an average of 96% of online customer activity in 2025. Offshore operators represented around 4%.
A higher estimated spending level among offshore customers changes the revenue calculation. The methodology applies a 2.0x offshore “spend coefficient” for the UK, resulting in an estimated 92.3% licensed share of customer spend or GGY. The methodology uses web traffic analysis adjusted for factors such as bounce rates and time spent on websites to estimate customer activity.
The offshore sizing process uses a bottom-up approach that identifies operators targeting the market and assesses traffic patterns through web audits and other online activity data. The methodology then calculates implied gambling revenue and channelisation rates.
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Licensed Operators Expected to Retain Majority Share
Despite the projected offshore expansion, licensed operators are forecast to continue generating most UK online gambling revenue through 2031.
Total UK online GGY, covering licensed and offshore activity, is projected to increase from approximately £8.8 billion in 2025 to £9.6 billion in 2031. This represents a nominal compound annual growth rate of 1.4%. After accounting for inflation, the forecast represents a real-term decline of approximately 12%.
Licensed operators are expected to account for around £8.2 billion of the £9.6 billion total in 2031. The forecast gives the onshore sector a nominal six-year GGY growth rate of approximately 0.2%.
Turnover projections show a broader contraction. Total online betting and gaming turnover is expected to decrease from approximately £165 billion in 2025 to £160 billion in 2031. Licensed turnover is forecast at around £124 billion by the end of that period.
Channelisation is expected to continue moving in the same direction. The licensed share of GGY is forecast to fall from 92% in 2025 to 85% in 2031. Measured by turnover, the onshore share is projected to decrease from 90% to 78%.
Betting and Gaming Council chief executive Grainne Hurst linked the projected offshore growth to the tax changes and warned about the consequences for the regulated sector.
“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.”
Source:
H2 report finds offshore online market growth linked to tax hike, igamingbusiness.com, 20 July 2026