Up to £60 million may have been wagered with unlicensed operators during this year’s Cheltenham Festival, according to industry estimates.
The figure has intensified concerns about the growing size of the UK gambling black market, as well as ongoing debates over whether stricter regulations and rising taxes are pushing players toward offshore platforms.
Figures released by the Betting and Gaming Council suggest illegal operators may have handled around £2 million per race across the four-day event.
With total betting turnover at Cheltenham often reaching close to £1 billion, it remains one of the most profitable periods in the calendar for both licensed and unlicensed bookmakers.
The estimate arrives amid an increasingly heated discussion in the UK over gambling reforms.
Government officials continue to defend tighter controls on online betting, while industry representatives argue that heavier taxation and stricter affordability checks could unintentionally drive customers toward unregulated alternatives.
Grainne Hurst commented on the situation, highlighting the vulnerability of major sporting events: “Cheltenham is the biggest week of the year for racing fans, and millions placed bets safely with regulated operators,” she said.
“But the criminal, harmful black market also tried to cash in, targeting punters with illegal betting that offers none of the protections provided in the regulated sector.”
Across Britain, total horse racing betting turnover is estimated at £11 billion annually, with roughly £8 billion placed online through legal channels.
The BGC has cited research suggesting the black market now accounts for around 6% of all betting activity, equating to tens of millions of pounds during Cheltenham alone.
The Cheltenham figures are likely to intensify industry criticism of government policy.
In late 2025, plans were announced to increase duty on online casino-style products from 21% to 40% starting in April 2026, one of the largest tax hikes the sector has faced. Meanwhile, betting duty on horse racing remains at 15%.
The BGC argues that, despite appearances, racing is not truly shielded from the wider financial impact. Responding to the budget, Hurst said: “This budget means thousands of job losses, not protection for racing.”
She added: “The only winner from this Budget is the black market – they’ve hit the jackpot.”
Operators warn that increased costs could lead to reduced investment in sponsorships, media rights, and levy contributions that help sustain the racing industry.
Hurst further stated: “Racing has seemingly been protected from higher betting duties. It sounds like a win, but anyone who understands how the sector operates knows that isn’t true.
This exemption is cosmetic. Beneath the surface, this Budget delivers a devastating blow to the very ecosystem that racing relies on.”
She also cautioned: “Steep tax rises layered on top of major new regulations will not make gambling safer.
They will do the opposite, pushing ordinary players out of the regulated sector, which protects consumers, and into the illegal, unsafe and highly harmful black market, where none of those safeguards exists.”
Echoing similar concerns, Nigel Huddleston said: “The government must recognise that tax policy is not separate from consumer safety.
If Labour’s tax rises make regulated operators less viable and less competitive, illegal operators will begin to flourish outside the law.”
Research from the UK Gambling Commission highlights several reasons why some users choose unlicensed platforms. These include:
- Better odds and promotions
- Access to restricted games
- Alternative currencies and payment methods
- Fewer limits on spending or stakes
- Minimal identity verification requirements
Andrew Rhodes warned about the risks: “The illegal online market is unsafe, unfair and criminal – that is why the Commission has invested heavily in this area in recent years.”
He added: “To be even more effective in combating the illegal market, it’s vital that we have both a deep and broad understanding of how it operates, and this insight is a crucial step in building that understanding in a very complex area to research.”
The situation leaves the UK gambling sector facing two opposing viewpoints. Regulators stress that the black market poses serious risks and requires stronger enforcement.
Meanwhile, industry leaders argue that excessive taxation and regulation could accelerate its growth.
With Cheltenham now at the centre of the debate, the balance between consumer protection and market competitiveness remains a key issue for the future of UK gambling.