Australia's 36% Offshore Market – A Lesson for the UK?

Whenever someone tells me that offshore gambling in the UK is a manageable problem, I point them to Australia. Not because the two markets are identical – they aren’t – but because Australia shows what happens when a significant proportion of a country’s gambling activity moves beyond regulatory reach. And the Australian numbers are sobering: 36% of the online betting and gaming market, worth 3.9 billion dollars in 2024, operates through illegal offshore operators. That’s not a fringe. That’s more than a third of the market.

I’ve studied the Australian case extensively, partly because I was asked to contribute to a comparative regulatory analysis in 2024, and partly because the parallels with the UK’s trajectory are close enough to be instructive – even where the differences are significant enough to require caution. Australia is not Britain’s future, but it is one possible version of it.

3.9 Billion Dollars and 14% Growth – Australia’s Offshore Numbers

Responsible Wagering Australia, the industry body representing licensed operators, published data showing that the offshore share of the Australian online market reached 36% in 2024, growing 14% over two years. The absolute figure – 3.9 billion dollars in annual wagers processed by illegal offshore operators – represents money flowing to sites with no Australian oversight, no consumer protections, and no contribution to Australian taxes or harm-reduction funding.

The growth trajectory is the most alarming element. A 14% increase in two years means the offshore market is expanding faster than the regulated market. If that differential persists, the offshore share will continue to climb, and the licensed market’s ability to fund the regulatory apparatus that protects consumers will erode proportionally. Australia is experiencing the textbook regulatory paradox: tighter regulation pushes activity offshore, which reduces revenue from the regulated sector, which weakens the capacity to enforce against offshore operators.

The composition of Australia’s offshore market differs from the UK’s in important ways. Australia bans online casino games entirely – only sports betting and lotteries are legally available online. This means the entire online casino market in Australia is, by definition, illegal. UK players, by contrast, have legal access to a fully licensed online casino market. The Australian offshore figure includes demand that has no legal outlet, while the UK’s offshore figure represents demand that chooses an unlicensed alternative over a legal one. The motivations overlap but aren’t identical.

Tax Pressure, Regulation, and Offshore Flight – The Parallels

Despite the structural differences, the parallels between the Australian and UK markets are striking enough to inform policy thinking.

Both countries have tightened regulation significantly in recent years. Australia introduced the National Self-Exclusion Register and strengthened its Interactive Gambling Act enforcement. The UK has introduced stake limits, spin delays, affordability checks, the statutory gambling levy, and – most consequentially – the 40% Remote Gaming Duty. In both cases, the regulatory intent is to reduce gambling harm. And in both cases, a measurable share of gambling activity has moved offshore in response.

H2 Gambling Capital’s projection for the UK forecasts that onshore iGaming channelisation will fall from 92-93% to approximately 80% following the April 2026 tax increase. If that projection materialises, the UK would reach an offshore share of roughly 20% – still below Australia’s 36%, but a dramatic jump from the current baseline. The Remote Gaming Duty increase from 21% to 40% is the most direct parallel: a sharp increase in the cost of operating within the regulated system, creating an immediate incentive for both operators and consumers to move outside it.

The UK’s 26 million pounds in additional enforcement funding and the seven-nation European regulatory coalition represent counter-measures that Australia lacks in equivalent form. Whether these counter-measures are sufficient to prevent UK offshore growth from approaching Australian levels is the open question. Australia’s experience suggests that enforcement alone – without addressing the demand-side factors that push consumers offshore – is insufficient to reverse the trend once it takes hold.

Why Direct Comparisons Between Markets Are Imperfect

I’d be doing a disservice to the analysis if I didn’t address the limits of the comparison, and this is where the academic critique becomes relevant.

Nordic researchers Virve Marionneau from the University of Helsinki and Soren Kristiansen from Aalborg University have argued that offshore gambling estimates are often used as political tools – deployed by industry lobbyists to argue for lower taxes and by regulators to justify larger enforcement budgets. The Australian 36% figure and the UK’s projected 20% are produced by different methodologies, relying on different data sources, with different assumptions about what constitutes “offshore” activity. Comparing them directly risks importing the biases of each estimate into a unified narrative.

The Australian market structure is fundamentally different. The ban on online casino games creates a supply vacuum that doesn’t exist in the UK. Australian sports betting taxation varies by state and is structured differently from the UK’s point-of-consumption model. The geographic isolation of Australia creates different dynamics for ISP blocking and payment disruption than exist in Europe, where cross-border internet traffic is the norm.

Consumer demographics also differ. Australia’s gambling culture is heavily centred on sports – particularly horse racing and Australian football – while the UK’s online market is more evenly split between casino and sports products. The types of offshore sites that serve each market, the games they offer, and the regulatory gaps they exploit are not identical.

None of this means the comparison is useless. Australia demonstrates, at scale, that regulatory tightening and tax increases can produce significant offshore migration. The specific magnitude may not transfer directly, but the direction of the effect is consistent across both markets – and across every other regulated market where similar policies have been implemented. The question for UK policymakers isn’t whether the Australian scenario could happen here, but what tools exist to ensure it doesn’t. The analysis of the 40% Remote Gaming Duty examines those tools and their projected effectiveness in detail.