Up to £60m may have been staked with illegal betting operators during this year’s Cheltenham Festival, the four-day annual horse racing event held in England, according to industry estimates. The figure has intensified a wider row over the scale of Britain’s gambling black market and whether tax rises and tougher regulation risk pushing more customers towards unlicensed sites.
The estimate, published by the Betting and Gaming Council during racing’s biggest week, suggests the illegal market may have taken the equivalent of about £2m per race across the four-day meeting. Cheltenham is widely reported to attract as much as £1bn in betting stakes during the festival, making it one of the most lucrative moments in the sporting calendar for legal and illegal operators alike.
The warning lands amid an increasingly bitter argument in Britain over gambling tax, consumer checks and black market growth. Ministers have defended a tougher approach to remote gambling, while operators say higher duties and more intrusive checks will not curb harm but instead hand business to offshore sites that sit beyond British rules.
Grainne Hurst, the BGC’s chief executive, said Cheltenham showed how exposed major sporting events remain to illegal operators. “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.”
Britain’s annual horse racing betting turnover is estimated at about £11bn, including roughly £8bn staked online in the legal market. Recent analysis cited by the BGC suggests the illegal market now accounts for around 6% of all betting stakes in Britain. Applied to Cheltenham alone, that would mean tens of millions of pounds flowing outside the regulated system.
A fight over tax and the future of racing
The Cheltenham figures are likely to deepen industry claims that government policy is making the legal market less competitive at the very moment unlicensed operators are becoming more visible.
Last December, the government announced that duty on online casino-style products would rise from 21% to 40% from April 2026, in what the industry says is the steepest single rise yet imposed on remote gambling. By contrast, the horseracing betting duty was left unchanged at 15%, and duty on in-person betting remains as it was.
The BGC has argued that the government’s decision to spare racing on paper does not protect the sport in practice. In its response 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.”
The industry’s case is that the damage will not stop with bookmakers. Betting firms argue that if licensed operators face steeper tax bills and stricter affordability checks, they will scale back sponsorship, media rights spending and levy contributions that help support British racing.
Hurst described the apparent protection for horse racing betting duty as illusory. “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 has also warned that “Steep tax rises layered on top of major new regulation 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.”
“The government must recognise that tax policy is not separate from consumer safety,” argued Shadow Secretary of State for Culture, Media and Sport, Nigel Huddleston MP. “If Labour’s tax rises make regulated operators less viable and less competitive, illegal operators will begin to flourish outside the law,” he added.
Who is using illegal sites?
The Commission found that many black market users are drawn by the desire of “finding better odds and offers, wanting to play games that are unavailable in Great Britain, the ability to use alternative payment methods (that is, not GBP), avoiding stake or spend limits, and lower barriers to entry such as minimal age or ID verification processes”.
Andrew Rhodes, the Commission’s chief executive, explained: “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.”
That leaves Britain with two competing warnings. The regulator argues the illegal market is real, dangerous and in need of tougher disruption. The industry says the same market will grow faster if licensed operators are hit with heavier taxes and more intrusive checks. Cheltenham has now become the latest battleground in that dispute.
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