UK raises online gambling tax from 21% to 40%
The United Kingdom Government has finally implemented one of the most feared moves by the sector: a significant increase in taxes applied to betting and online casino, a measure included in the autumn budget and initially leaked by the Office for Budget Responsibility (OBR).
Starting from April 2026, the Remote Gaming Duty will increase from 21% to 40%, practically doubling the tax burden for companies operating online games. At the same time, the Bingo Duty, currently at 10%, will be eliminated.
The budget also includes a new tax scheme for remote betting. From April 2027, a General Betting Duty of 25% will be established, excluding types of bets such as pools, self-service terminals, spread betting, and horse racing. Additionally, the Government will freeze the casino gaming duty bands for 2026-27 and adjust them thereafter for inflation (RPI).
Fiscal impact and expected drop in revenue
According to projections by the OBR, the State could collect an additional £1.1 billion by 2029-30. However, the institution also anticipates significant side effects:
- The industry would pass on up to 90% of the tax increase to the user, through lower payout rates or higher prices.
- Demand would fall significantly, reducing the final revenue.
- The fiscal yield of the change would decrease by £500 million by 2029-30 due to lower gaming volume.
- A shift of players towards less taxed products would subtract another £100 million from the overall estimate.
Growing risk of black market
The OBR also warned about a possible growth of the unregulated market.
Experts such as Jordan Lea, founder of Deal Me Out, agreed:
“It is undeniable that we will see a massive migration of consumers towards illegal operators. This is a defining moment for the gambling industry in the United Kingdom.”
The fear is not new. The Gambling Commission and independent organizations such as PwC have reported in recent years a steady growth of offshore operators targeting the British public, especially when restrictions or taxes increase.
Think tanks have been pushing for increases for months
Several influential research centers had been requesting increases in the tax burden:
- IPPR recommended taxes of 50% for online and retail slots, and 25% for betting shops.
- Social Market Foundation (SMF) proposed raising the Remote Gaming Duty to 50%, keeping the Machine Gaming Duty at 20%.
Both groups justified their proposals on the need to finance public health policies related to problem gambling.
Sector reaction: investment at risk and users more exposed
Operators and business associations are expected to release official statements in the coming days, although many companies had already expressed their position. During the pre-budget debate, Stella David (Entain) warned that an increase of this magnitude could:
- Reduce the attractiveness of operating within the regulated market.
- Impact jobs and the retail ecosystem.
- Increase migration towards unlicensed operators.
David emphasized: “The average player does not distinguish between a regulated site and an illegal one. Black market operators appear professional, but their profits do not return to the country nor comply with protection standards.”
Consequences for the market:
1. Risk of contraction of the regulated market
- Several operators will reconsider investments and sponsorships in the United Kingdom.
- Tax increases usually translate into fewer product offerings, fewer promotions, and potential exit of mid-sized brands.
2. Greater leakage to offshore operators
- Up to 200,000 British players interact annually with unregulated platforms.
- With higher taxes and lower returns for the user, that number could grow.
3. Increased risks for the consumer
- Black market users lack protection from loss limits, self-exclusion, or identity verification.
- There is no guarantee of prize payment.
- Anti-money laundering controls are not applied.
4. Reconfiguration of the product mix
With such a marked difference between taxes of 25%, 40%, and excluded types, operators could:
- Migrate investment towards less taxed products.
- Abandon verticals with low fiscal profitability.
- Increase the weight of horse race bets or pools.
5. Tension between fiscal objectives and public health goals
Experts from the London School of Economics have warned that excessive taxes can have the opposite effect to what is intended:
- Push players towards unregulated environments.
- Reduce the regulated sector’s capacity to finance prevention and treatment.
Tags: UK, Office for Budget Responsibility, UK betting taxes, UK online gaming taxes