The UK gambling sector is facing one of its most significant fiscal shifts in years. As part of the government’s latest budget, sweeping tax reforms were unveiled that will sharply increase the cost of operating in the regulated market. The changes come after months of speculation, industry pushback and Treasury consultations, and are positioned as key measures to help plug the country’s fiscal gap. With taxation now set to rise across online gaming and betting, operators are preparing for a materially tougher operating environment from 2026 onward.
Remote Gaming Duty Jumps to 40%
The remote gaming duty will rise from 21 percent to 40 percent starting April 2026, according to an OBR document published ahead of the budget. This unexpected jump triggered an immediate downturn in gambling stocks and marks one of the most aggressive duty increases introduced in the UK market.
New 25% Remote Betting Duty
From April 2027, a new general betting duty will apply at 25 percent, up from the current 15 percent. The new rate applies solely to online betting profit and excludes spread betting, pool bets, horse racing bets and wagers placed at self-service betting terminals. Horse racing successfully secured the carve-out it had campaigned for.
Billions in Additional Revenue
Government forecasts indicate the reforms will raise £4 billion in gambling tax receipts in 2025-26, with a further increase to £5 billion by 2026-27. By 2029-30, the changes are expected to generate £1.1 billion in new tax revenue.
Expected Market Impact
The OBR expects operators to pass roughly 90 percent of increased tax costs onto consumers through price adjustments and reduced payouts. This is forecast to lower demand and accelerate migration toward unlicensed operators, particularly as the tax differential between sectors widens.
How the UK Reached This Point
The reforms stem from an April consultation exploring whether the UK should merge the current three tax brackets into one unified rate. Industry groups warned of damaging consequences for retail and horse racing if remote betting duty rose sharply. The Treasury Select Committee later advised taxing verticals separately based on risk profile, resulting in the dual-structure now announced.
Additional Budget Measures
- Bingo duty (10 percent) abolished
- Casino gaming duty bands frozen for 2026–27
- Horse racing exempt from the new betting duty
- Self-service terminal bets remain outside the new tax
The reforms were unintentionally disclosed through an early OBR publication, prompting criticism in Parliament over budget leaks and pre-briefing practices.
Sources: Next.io, IGB
