UK Hikes Remote Gaming Duty to 40%, Adds Betting Tax in ’27

These moves signal a significant shift in the government’s approach to taxing the burgeoning online gambling sector, promising a substantial boost to tax revenues while simultaneously raising questions about the long-term effects on consumer behavior and industry competitiveness.

The headline figure is undoubtedly the leap in remote gaming duty. This hefty increase, revealed in the Office of Budgetary Responsibility (OBR) document released ahead of the Chancellor’s speech, will directly impact online casinos, poker sites, and other forms of remote gaming. This will likely be passed on to consumers.

The new general betting duty, set at 25%, will apply to online betting profits but excludes spread betting, pool bets, and wagers on horse racing. Bets made at self-service betting terminals will also be exempt, creating a somewhat fragmented tax landscape.

The UK Treasury is undoubtedly a winner. They anticipate a windfall of £4 billion in tax receipts in 2025-26, a 9.8% increase from the previous year. The following year, 2026-27, is projected to bring in a further 24.8% increase, reaching £5 billion. But at whose expense?

While the government expects operators to shoulder the burden initially, they also acknowledge that up to 90% of the duty increases could be passed on to consumers, potentially leading to reduced demand and a subsequent £500 million reduction in yield by 2029-30. It’s a high-stakes gamble, to say the least.

This isn’t a bolt from the blue. Back in April, HM Revenue & Customs (HMRC) and the Treasury floated the idea of a single remote gambling tax to replace the existing three-rate system, as detailed in their consultation document: HM Revenue & Customs (HMRC) and the Treasury proposed a single remote gambling tax. The industry pushed back hard, fearing the impact on retail and horse racing sectors.

Think tanks weighed in, some suggesting even higher rates, potentially reaching 50%. The Treasury Select Committee launched an investigation, questioning stakeholders about the potential impact on problem gambling rates and even probing operators about their offshore bases, as reported by iGamingBusiness: whether the sector was overstating its concerns for their retail businesses.

The Committee ultimately advised the government to differentiate tax rates based on risk profiles, a nuanced approach outlined in their report: tax verticals separately based on their risk profile .

The implications of these tax hikes extend beyond mere revenue generation. The increase in remote gaming duty and the introduction of a new betting duty could reshape the competitive landscape, potentially driving some operators to reconsider their presence in the UK market. It also raises concerns about a potential rise in unregulated gambling as consumers seek to avoid higher costs. The abolition of the 10% bingo duty and the freezing of casino gaming duty bands offer a slight counter-balance, but the overall impact is undeniably a more expensive environment for online gambling in the UK. Only time will tell if this gamble pays off for the Treasury, or if it ultimately pushes players and profits elsewhere.