A new analysis by PwC, conducted for the Betting and Gaming Council (BGC), has found that aggressive taxation and tighter regulation are leading to slower market growth and increased black-market activity in Europe’s iGaming sector. The report reviewed 17 European jurisdictions comparable to the UK and explored the effects of tax and regulatory changes on operator behavior, player migration, and fiscal outcomes.
The findings show that countries with stricter policies including France, Germany, and the Netherlands have recorded lower levels of onshore gambling participation. In contrast, jurisdictions that maintained moderate tax rates achieved higher annual growth and stronger tax returns.
According to PwC, tax rates above 25% of gross gaming revenue reduce incentives for both operators and players to remain within licensed frameworks. Following tax or regulatory increases, operators tend to cut bonuses, reduce marketing, and raise betting margins changes that often drive consumers to offshore, unlicensed platforms offering better value.
The report also found that players rank price competitiveness, promotional value, and trust in the operator as key decision factors. High-spending users, who make up the majority of stakes, were especially responsive to reduced value and increased restrictions.
PwC concludes that excessive taxation and restrictive regulation can inadvertently undermine fiscal objectives by shrinking the taxable base. Instead, the study calls for balanced, evidence-based policymaking to ensure sustainable growth, strong channelisation, and effective consumer protection across Europe’s gambling industry.
