PwC: High Gambling Taxes Fuel Europe’s Black Market

A recent PwC analysis, commissioned by the Betting and Gaming Council (BGC), reveals that increasing gambling taxes and stricter regulations across Europe may be unintentionally driving players toward unregulated markets.

Study Scope and Key Findings
The report assessed 17 European jurisdictions with similarities to the UK, evaluating how fiscal and regulatory policies influence operator behavior, player engagement and government revenue. Findings indicate that higher taxes have slowed market growth, reduced onshore activity and decreased tax efficiency.

The UK’s gambling tax framework now mirrors the European average, with rates at 25% for horse racing, 21% for casino gaming, and 15% for sports betting. Policy updates, such as the Remote Gaming Duty hike from 15% to 21% in 2019 and stricter affordability checks, have stabilized the market but may have pushed players toward unlicensed platforms.

Impact Across European Markets
Countries with more restrictive tax and regulatory frameworks, including France, Germany and the Netherlands, saw slower market growth between 2019–2024, averaging 6% annually, compared to 17% in markets that maintained or reduced tax rates. In Central and Eastern Europe, growth has been stronger but varies by jurisdiction.

Operators often responded to tax hikes by cutting bonuses and marketing expenditures, increasing gross win margins and reducing player returns. For example, French and Spanish operators cut bonus offerings by up to 47% after advertising restrictions. In Germany, a 5.3% turnover tax led to fewer available games and a 50% decline in slot and poker tax revenue.

Consumer Behavior and Market Risks
High-value players, who constitute the top 5% of users and account for 80% of stakes, are particularly sensitive to reduced bonuses and restrictions. Surveys indicate that 40–53% of players across multiple countries would consider unlicensed platforms, with roughly half of active gamblers in France and Germany already using offshore sites.

The report shows that jurisdictions with tax rates over 25% often saw slower revenue growth, while countries with lower rates achieved average annual increases of 13%, compared to 9% for heavily taxed markets. The Netherlands, which increased its tax rate from 30.5% to 34.2% in 2025, expects a 9% decline in annual tax receipts.

Policy Implications
PwC emphasizes the need for a balanced approach, combining responsible regulation with tax policies that do not drive consumers away from licensed operators. The UK Gambling Commission has noted that a lack of reliable data on the size of the black market complicates assessments, highlighting the importance of evidence-based policy decisions.

The analysis underscores a growing challenge across Europe: ensuring fiscal measures and player protections strengthen regulated markets rather than inadvertently fueling unregulated activity.