Black market set to outpace UK licensed ad spend
Table of contents
- WARC analysis commissioned by the BGC projects unlicensed operators will spend around £844.7m on UK advertising in 2025-26, a rise of 32% year on year, per WARC analysis.
- Licensed operators are forecast to cut ad budgets by 9.2% to approximately £1.05bn over the same period, with the gap projected to close entirely by 2027-28.
- The Betting and Gaming Council is calling on the government to act faster to contain black market growth, warning that higher taxes on regulated operators are accelerating the shift.
New research commissioned by the Betting and Gaming Council (BGC) and conducted by global marketing intelligence firm WARC warns that unlicensed gambling operators are on course to overtake the regulated sector in UK advertising expenditure within two years, describing the shift as a ‘tectonic’ change in the structure of the market.
Per WARC analysis, gambling advertising spend is set to increase for the sixth consecutive year in 2025-26, but almost all growth is now being driven by unlicensed companies. Licensed operators are forecast to cut their advertising budgets by 9.2% to around £1.05bn, as unlicensed market spend rises by approximately 32% to £844.7m, according to the same analysis.
The 2028 crossover
WARC projects that in 2026-27, spending by unlicensed firms will rise a further 10.6% to around £934.2m, alongside a 2.6% drop in licensed operator spend to approximately £1.022bn, per the intelligence firm’s analysis. Unlicensed operators are on course to account for more than half of all gambling sector ad spend by 2028, the report concludes.
WARC also noted that overseas operators are paying increasing amounts to reach UK consumers via search and social media. Sponsorship is described as heavily leveraged towards unregulated companies, with the illegal market potentially overtaking the licensed sector’s share of sponsorship ad spend as soon as 2026-27, per WARC.
The trajectory reflects a structural imbalance that is intensifying. Industry leaders including Flutter Entertainment, Entain and Evoke are expected to cut marketing spend amid the near-doubling of Remote Gaming Duty from 21% to 40%, which took effect on 1 April 2026. Unlicensed operators, which pay no UK duties and face none of the compliance costs borne by regulated businesses, face no such pressure to retrench.
BGC calls for urgency
Grainne Hurst, chief executive of the Betting and Gaming Council, stated that the findings demand an immediate government response.
“The real question is whether advertising is coming from regulated operators, who are held to strict standards, or from the harmful illegal black market, which operates entirely outside the rules. Targeting licensed operators when their advertising spend is already falling will not reduce overall advertising, it will simply bolster the harmful illegal black market which is aggressively targeting UK customers.”
Hurst stated that the government must go “further and faster to clamp down on the black market before it is too late.”
The BGC has previously cited Frontier Economics research estimating that around 1.5 million Britons stake up to £4.3bn annually on unlicensed sites, though separate estimates put the figure closer to £2.7bn wagered on the black market. Regardless of the precise figure, the direction of travel is not in dispute: the Gambling Commission has separately estimated that around 10% of British betting volume passes through illegal operations.
Policy backdrop
The government has taken some steps to counter the illegal market. The Department for Culture, Media and Sport has allocated £26m to the Gambling Commission over three years and established an Illegal Gambling Taskforce, bringing together companies including Google, Mastercard and Visa alongside law enforcement and advertising bodies. A sports sponsorship ban on unlicensed operators, including in the Premier League, is also under consultation.
The BGC has welcomed those measures but argues they fall short. Hurst has stated that the £26m allocation “misses the point entirely,” contending that a comprehensive solution is needed to prevent consumers from engaging with the black market at all.
The WARC data will add weight to the industry’s argument that regulatory and tax burdens on licensed operators are producing an unintended consequence: a shrinking, higher-cost regulated sector competing against an expanding, unconstrained illegal one for the same pool of UK gamblers. For policymakers, the findings pose a difficult question.
Tighter advertising restrictions on licensed operators, long sought by reform advocates, could accelerate the imbalance WARC has already identified, redirecting consumer attention towards platforms operating with no age verification, no safer gambling tools and no tax contribution.
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