Key Moments:
- The UK government has announced significant tax increases on online gambling products, with new rates set to take effect in April 2026 and April 2027.
- The Office for Budget Responsibility projects that around £500m in potential tax receipts may be lost by 2029-30 as customers and operators adjust their behavior in response to the higher duties.
- The Betting and Gaming Council estimates that stakes in the black market could rise by 140%, with nearly 17,000 jobs at risk due to the new tax measures.
Government Reveals Major Tax Changes for Online Gambling
In its latest Budget, the UK government has introduced a sweeping set of tax hikes on online casino-style products and sports betting. Starting in April 2026, the Remote Gaming Duty (RGD) on online casino-style games will almost double, increasing from 21% to 40%. A new 25% remote General Betting Duty on online sports bets will also take effect in April 2027. The Treasury anticipates that these changes should generate approximately £1.1bn in additional gambling tax revenue by the 2029-30 fiscal year.
Industry and OBR Raise Concerns About Revenue and Market Impact
While the Treasury projects a substantial increase in tax receipts, the Betting and Gaming Council (BGC) – representing much of the regulated gambling sector – has voiced strong objections. The BGC points to analysis from the Office for Budget Responsibility (OBR), which indicates that the actual increase in revenue may fall well short of Treasury expectations.
The OBR states that, after considering behavioral changes from both consumers and operators, the measures will reduce the anticipated yield by about one-third compared to a scenario where there is no change in behavior. By 2029-30, the OBR expects roughly £500m in potential revenues will be lost as companies pass the higher tax on to customers through worse odds or higher margins, prompting some clients to leave regulated channels. The OBR estimates operators will likely pass about 90% of the added tax burden directly onto punters, making regulated products less appealing and potentially pushing players toward unlicensed, untaxed sites.
Risks to Employment and Channelization Highlighted by Industry
The BGC, citing external modeling by EY, warns that the proposed tax increases could jeopardize as many as 17,000 jobs across online betting, gaming, and related tech or data positions. The organization further estimates that more than £6bn in stakes could migrate to the black market, marking a 140% surge in illegal play. BGC chief executive Grainne Hurst remarked, “cannot ignore the fact that its own figures show serious damage ahead.” Hurst added that such high tax rates could diminish the competitiveness of licensed operators while giving an edge to unlicensed platforms offering no player protections.
According to the BGC, the regulated sector currently adds approximately £6.8bn annually in gross value to the UK economy, supports over 109,000 jobs, and pays about £4bn in tax. This contribution includes direct funding for racing, sport, and tourism. The council contends that the government’s new package could erode this base just as global competition for investment intensifies in the betting and gaming industry.
Comparative International Analysis Suggests Caution
A PwC study commissioned by the BGC examined the impact of higher tax rates and stricter regulations in countries such as France, Sweden, and the Netherlands. The research found that these conditions have led to increased migration of online gambling activity to offshore operators. In contrast, countries operating with more moderate taxes – like Spain and Denmark – have succeeded in keeping the majority of activity within licensed platforms.
Industry stakeholders have noted that the new 40% RGD positions the UK above many European markets, including some that have already experienced significant channelization challenges. Analysts have cited the Netherlands as an example where a tax hike was followed by rising illegal play and weaker-than-expected government revenue.
Policy Contradictions and Calls for Further Discussion
Many in the gambling sector argue that the UK government’s policy objectives are contradictory. While the government is tightening measures to reduce gambling harm – including advertising restrictions, affordability checks, and product redesigns – it is also depending on sharp increases in tax revenue from the same activities. The OBR has cautioned that changes in behavior among players and companies are likely to undermine these fiscal goals.
Operators suggest that because 90% of the tax rise will be passed onto customers, those who are most engaged – the bettors and casino players targeted by safer-gambling initiatives – will bear the brunt. This could make riskier offshore options more attractive to these groups.
In response, the BGC is urging HM Treasury and the Department for Digital, Culture, Media and Sport to engage in dialogue with industry representatives, independent analysts, and the Gambling Commission. Hurst called for “a genuinely evidence-based conversation” to balance fiscal objectives against risks to jobs and the legal market. As reflected in EY’s modeling, the BGC argues that a less aggressive tax structure could yield more consistent revenue and better preserve regulated channelization over time.
Overview of Proposed Changes and Industry Reactions
| Measure | Current Rate | New Rate | Implementation Date |
|---|---|---|---|
| Remote Gaming Duty (RGD) on online casino products | 21% | 40% | April 2026 |
| Remote General Betting Duty on online sports bets | N/A | 25% | April 2027 |
- Author
Daniel Williams
