H2 says UK offshore online gambling could grow after Remote Gaming Duty increase, with offshore GGY rising to £685 million in 2025

H2 Gambling Capital says the UK’s offshore online gambling market is set to expand after the Remote Gaming Duty (RGD) increase, while onshore channelisation keeps slipping. For PSPs, acquiring teams, and operators, the practical point is simple: a higher tax burden on licensed brands can push spend toward offshore routes, where the traffic may be smaller but the wallet share is not.

1. H2 estimates that onshore operators’ market share fell by 5% between 2019 and 2025. In the same period, offshore gross gaming yield (GGY) is projected to rise from approximately £200 million in 2019 to £685 million in 2025, while offshore turnover is forecast to increase from around £5 billion to £16.6 billion.
2. The modelling is based on bottom-up web traffic analysis, with adjustments for bounce rates, time spent on sites, and a “spend coefficient” that reflects higher-value customers attracted to offshore brands. For the UK market, H2 uses a 2.0x spend multiple for offshore visitors relative to onshore visitors, which is why licensed sites capture about 96% of web visits but only about 92% of spend.
3. Looking further out, H2 forecasts offshore GGY will reach about £1.4 billion by 2031, implying a compound annual growth rate (CAGR) of 12.7% from 2025. Offshore turnover is expected to climb to approximately £36 billion by 2031.
4. The share of online gambling handled by UK-licensed operators, or “channelisation,” fell from 97% in 2019 to an estimated 92% in 2025, and is forecast to drop to 85% by 2031. By turnover, the licensed market’s share is expected to decline from 90% in 2025 to 78% by 2031.
5. H2 says the rise in RGD from April 2026 is a “significant headwind” for onshore operators and a driver of player migration offshore. It also projects a softer near-term picture for regulated UK iGaming: casino GGY rose 14% to £5.70 billion in 2025, betting GGY fell 6% to £2.45 billion, active players were down 7%, and bets placed were down 6%. iGaming GGY is forecast to decline by 1% to £5.64 billion in 2026 and then by 5% year-on-year to £5.39 billion in 2027.

One useful detail for payments teams: H2 says overall UK online GGY, combining onshore and offshore, rises only modestly from £8.8 billion in 2025 to £9.6 billion in 2031, a nominal CAGR of 1.4%, but that still masks a real-term decline of about 12%. In other words, the pie does not grow much, and the slice that stays in the licensed channel gets thinner.