In November 2025, a study by PwC, commissioned by the Betting and Gaming Council (BGC), has shed light on the complex relationship between rising gambling taxes and the expansion of black market activities in the European iGaming sector. This comprehensive analysis covered 17 European regions comparable to the UK, assessing how tax and regulatory frameworks influence market performance, player preferences, and government revenue streams.
The findings are clear: tighter regulations and elevated tax rates correlate with decelerated market growth, decreased channelisation of users to regulated operators, and a reduction in tax efficiency. Currently, the UK’s gambling regime is in line with the European average, where tax rates stand at approximately 25% for horse racing, 21% for casino games, and 15% for sports wagering. Since 2014, the UK has seen significant policy changes, most notably the hike in Remote Gaming Duty from 15% to 21% in 2019 and the introduction of affordability checks, situating the UK among “stable” market environments. However, these modifications may inadvertently drive players to unregulated alternatives.
The analysis points to countries like France, Germany, and the Netherlands, which have adopted stricter gambling laws and are now witnessing a slowdown in onshore gambling activities. Between 2019 and 2024, the Western European markets that increased tax rates recorded an average annual growth of only 6%, whereas those maintaining or lowering taxes enjoyed a remarkable growth rate of 17%. In Central and Eastern Europe, where regulatory measures are generally more lenient, growth is more robust, albeit varying significantly among different nations.
The study also uncovered that post-regulatory or tax changes, many large operators trimmed gaming bonuses as a share of gross gaming revenue (GGR), with 13 out of 19 operators implementing such reductions. Additionally, 15 of 21 operators curtailed marketing budgets. Consequently, operators increased their betting gross win margins, leading to diminished returns for players. In countries like France and Spain, bonuses plummeted by as much as 47% after the introduction of new advertising restrictions. Germany’s imposition of a 5.3% turnover tax not only reduced game offerings but also slashed tax revenue from online slots and poker by an alarming 50%.
Consumer behavior has been significantly influenced by these regulatory and fiscal adjustments. According to the PwC report, players prioritize pricing, bonus offerings, and trust in operators when choosing a platform. High-stake participants, comprising the top 5% of players but accounting for approximately 80% of total betting stakes, are particularly sensitive to reduced value and additional constraints. Surveys across different regions reveal that a substantial segment of gamblers, ranging from 40% to 53%, are open to exploring unlicensed websites. In France and Germany, roughly half of online gamblers have engaged in offshore betting.
The data highlights a concerning trend: elevated gambling tax rates, particularly those surpassing 25% of gross gaming revenue, have not fulfilled expectations of boosting tax receipts. Instead, regions with lower tax rates have seen an average annual increase of 13% in gambling tax collection, compared to just 9% for those with higher levies. In the Netherlands, the tax rate increment from 30.5% to 34.2% this year is predicted to result in a 9% decline in annual tax receipts despite the increase.
These insights underscore the necessity for a balanced strategy that safeguards consumers while ensuring fiscal policies do not inadvertently drive users to unregulated markets. This persistent challenge remains a pressing issue for policymakers across Europe. As one industry observer noted, the delicate act of setting tax policies requires a nuanced understanding to avoid unintended consequences.
On the other hand, the UK Gambling Commission has recently admitted to a lack of comprehensive data to accurately quantify the size of the gambling black market. This gap in information makes it challenging to conclusively determine whether increased restrictions and taxes have successfully reduced channelisation.
The debate continues as to whether higher taxes and tighter regulations truly benefit the market or if they simply push more consumers towards unregulated platforms. Some industry experts argue that a more relaxed regulatory environment could foster growth and reduce the allure of the black market, while others insist that strong regulations are essential for consumer protection and ethical business practices. This ongoing dialogue highlights the complexity of crafting effective gambling policies in a rapidly evolving industry.
Erik Agary is a seasoned writer at True Games Reviews, specializing in gaming, casino games, and interactive entertainment. With a passion for all things digital, Erik dives deep into the latest trends and developments in the gaming world, offering insightful reviews and detailed analysis. His expertise spans across multiple gaming platforms, ensuring comprehensive coverage that resonates with both novice and experienced gamers alike.
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