What the industry feared most has come to pass, as the gambling tax for operators in the UK market has been increased.
A leak of the UK government’s autumn budget from the Office for Budget Responsibility (OBR) revealed that from April 2026, remote gaming duty will rise from 21% to 40%, as well as bingo duty being abolished from its current 10%.
A new general betting duty rate for remote betting will also be introduced from April 2027 at 25%, excluding self-service betting terminals, spread betting, pool bets and horse racing. A freeze in casino gaming duty bands in 2026-27 has also been announced, with usual RPI (retail price index – inflation) uprating thereafter.
The government could raise £1.1bn through gambling tax by 2029-30, according to the OBR estimates.
However, the OBR also predicted that the resulting changes in gambling tax will reduce yield by a third, with operators estimated to pass around 90% of the duty increases through price increases and reduced payouts, resulting in a consumer demand reduction.
It has been estimated by the OBR that this will lead to a decrease in the yield from the measure by £0.5bn by 2029-30.
The demand estimate took into account the potential rise in customer movement to the black market, increasing the exposure of players to an unregulated space fraught with a lack of safeguards.
Jordan Lea, Founder of Deal Me Out, echoed this concern, emphasising his belief that it ‘is now unquestionable, that we will see vast consumer migration’ to the illicit market, as he described the tax hikes as a ‘defining moment for UK gambling’.
As well as this, the OBR detailed that players will likely shift to different forms of gambling and operators restructuring their offerings to minimise tax costs, given the wide rate difference between different gambling products, reducing the yield by a further £0.1bn.
This rise follows the proposals from think tanks in recent months, the Institute for Public Policy Research (IPPR) and the Social Market Foundation (SMF), which called for an increase in gambling tax.
The IPPR proposed duties to rise for the profitable parts of the industry, with online and retail slots taxed at 50%, general betting duty levied on bookmakers at 25%, general betting duty at 15% and horserace betting levy board rates at 10%.
Meanwhile, the SMF suggested keeping machines gaming duty at 20%, but increasing remote gaming duty to 50% and general betting duty to 25%, except for off-course horse racing bets, which would be cut to 5%.
Increases in gambling tax also follow a recent statement from the Treasury Committee, which argued that online gambling should be taxed at a rate “which reflects the growth of harmful and addictive betting practices”.
Operator and industry reaction is expected to flood in over the next few days, but we widely know how many of the big names will react to the increase, with investment and retail operations being reevaluated.
As rumours of tax hikes escalated in the long run up to the budget, Entain’s Stella David warned of the consequences: “I don’t expect anyone on the street to feel sorry for us at all; that’s not their job, but a normal person on the street who likes to have a bet can’t tell the difference between a black market site and a regulated site,” she said.
“Black market operators are there to take as much cash out of the UK as possible, with as little friction as possible. They can look very slick and very professional. The problem is none of the profits they make come back in tax to the UK Government.”
