UK Gambling Industry Shocked by 40% Tax Increase Announcement
UPDATE: A leaked document from the UK’s Office for Budget Responsibility has sent shockwaves through the gambling industry, revealing an unprecedented increase in remote gaming duty to 40%—far exceeding the 30–35% range anticipated by market operators. This startling announcement has immediate implications for the sector, which is bracing for significant upheaval.
The leak disclosed that the remote gaming duty will escalate from 21% to 40% starting in April 2026. The implications are dire, with industry representatives warning that this steep increase could drive many online casino operators into financial turmoil, particularly those with slim profit margins or substantial marketing expenses. The abolition of the 10% bingo duty offers little consolation to operators facing a tax burden nearly double what they currently endure.
As news of the tax hike broke, shares in major companies like Entain, Flutter, and Evoke plummeted. Early trading saw declines ranging from single digits to nearly 20% for some firms, reflecting investor shock over the magnitude of these changes. This downturn occurred even before the Chancellor officially presented the budget, underscoring the anxiety surrounding the government’s predictions of shifting consumer behavior that could undermine anticipated revenue gains.
According to the OBR, the Treasury aims to raise GBP 1.1 billion (approximately $1.46 billion) annually from these revamped gambling duties by the fiscal year 2029–30. However, this figure is expected to be significantly lower as officials acknowledge that the tax increase may drive bettors towards offshore alternatives or reduce overall gambling activity. Estimates suggest that about one-third of potential revenue could be lost as consumers seek options outside the UK.
The proposed tax overhaul is not limited to the immediate changes in 2026. It also includes the introduction of a new 25% general betting duty in 2027, excluding spread betting, pool betting, and horse racing, a concession made following intense lobbying from the racing industry. Meanwhile, traditional casino duty rates will be frozen for one year before returning to inflation-linked adjustments.
Industry leaders express deep concern that these sweeping changes could inadvertently lead to job losses and potentially drive smaller companies out of business. The pressure is already mounting; Flutter’s Sky Bet has relocated its headquarters to Malta, a move designed to avoid tens of millions in future tax liabilities. Analysts predict that this could trigger a wave of relocations and mergers as companies seek to navigate the new tax landscape.
The OBR anticipates that over time, operators will adapt their product offerings to cushion the impact of the increased taxes. However, the immediate outlook is grim, with the sector preparing for a challenging transition. While a 40% tax rate is not the worst-case scenario discussed in recent months, it is perilously close, forcing boards and investors to confront the stark reality that the UK gambling market is poised for contraction.
As the industry grapples with these developments, stakeholders are urged to stay informed and prepare for the potential fallout. The ramifications of this tax increase could reshape the landscape of the UK gambling sector in the coming years, making this a critical moment for operators and consumers alike. Stay tuned for further updates as this situation evolves.
