UK Deals Massive Blow to the iGaming Industry, as Online Betting Duty is Set to Rise to 40%
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In a move sure to shake the UK iGaming and online betting industry to its core, Chancellor Rachel Reeves announced on November 26th a dramatic gambling tax reform that’s set to raise online gaming duty from 21% to 40% starting in April 2026 and introduce a 25% duty for remote gambling in 2027.
Not only that, but the government also plans to raise the tax on sports wagering from 15% to 25% from April 1st, 2027. This new fee will only apply to online betting profit, excluding self-service terminals, pool bets, horserace betting, and spread bets. Additionally, bingo duty will be entirely abolished by April 2026.
The UK government justifies this measure as an attempt to tackle the risks associated with online gambling and get bigger tax revenues while strengthening consumer protection, with a projected revenue of £4 billion in 2025-26 and £5 billion in 2026-27.
Outrage in the Industry: What Do the Experts Say?
As previously stated, this overhaul in British gambling tax policies has caused quite the uproar in the UK iGaming industry, as experts are appalled at the prospects for the online betting market.
Grainne Hurst, CEO of the Betting and Gaming Council (BGC), didn’t stay silent regarding the decision, stating:
“Massive tax increases for online betting and gaming announced in the Budget make them among the highest in the world, and are a devastating hammer blow to tens of thousands of people working in the industry across the UK, and millions of customers who enjoy a bet.”
Hurst added that “While we welcome the decision not to raise land-based duties and to scrap bingo duty – these excessive online tax increases will undermine jobs, investment and growth across the UK.”
“The Government’s Budget is a massive win for the incredibly harmful, unsafe, unregulated gambling black market, which pays no tax and offers none of the protections that exist in the regulated sector. These decisions are bad for jobs, bad for customers, bad for sports – and bad for safer gambling.“
For his part, Lee Hills, CEO of SolutionsHub, expressed:
“The decision to lift Remote Gaming Duty to 40 per cent and Remote General Betting Duty to 25 per cent will be remembered as the moment the UK online gambling sector shifted from a regulated success story to a market in structural retreat. For years, the UK has been held up as the example of how rigorous oversight, predictable regulation and a stable tax regime supports a diverse and innovative digital industry. That position has now been undone in one Budget announcement that has left operators, investors and advisers genuinely stunned.“.
– Lee Hills, CEO of SolutionsHub
To these statements, we can add the comments made weeks prior by the Gibraltar Gaming Commissioner and non-executive director of the Independent Betting Adjudication Service (IBAS), Andrew Lyman, who, in an unprecedented example of a gambling regulator taking a partialized stance regarding a political debate, took to LinkedIn to criticize the measure:
“Because my role is primarily a regulatory one, I have, until today, remained silent in the debate on the rates of UK betting and remote gaming duty. I think that the idea that the industry can absorb significant top line tax rises and not suffer wider structural impact and loss of bottom line profit is disingenuous.”
As it stands, the decision made by the UK government regarding online betting duty has caused a wave of criticism by big names in the iGaming industry, as detractors see the new tax rates as harmful not only for online betting operators, but for the nation’s economy as well.
Online Betting in Numbers for the UK Market
Just a day before the new tax rates were announced, the Gambling Commission released figures that showed the iGaming industry made £16.8 billion from users in the year to March, marking a rise of 7.3% from the previous year.
This rise in gross gambling revenue was, for the most part, a consequence of online betting, increasing by more than £900 million to a yearly amount of £7.8 billion.
Regarding these figures, the Office for Budget Responsibility (OBR) estimates that changes in remote gambling duty will raise £1.1 billion a year by 2029-30. The government also states that gambling operators are likely to pass on up to 90% of the duty increase to customers through the provision of less attractive betting odds and bonuses.
Radical Changes as Online Gambling Market is Likely to Plunge
The overhaul in tax rates for online gambling duty marks a sharp contrast iGaming industry’s past in the UK, as the country used to be one of the safest and most stable markets for remote betting.
A UK gambling license used to be a very desirable asset for iGaming companies and operators, as predictable regulations and stable tax policies allowed for continuous investments and innovations for the industry.
The new tax policies, of course, undermine and invalidate all the factors that made the UK a safe bet (pun intended) for gambling operators, forcing companies to reevaluate their presence in the country.
In this regard, Hills expressed:
“Operators spent the past decade relying on the UK licence as a stabilising asset, something that reassured investors and helped anchor blended multiples across less predictable pre-regulated markets and other regulated jurisdictions when planning acquisitions or exits. A business with a UK footprint carried a degree of reliability and maturity that supported long-term planning. That logic no longer holds. A 40 per cent tax rate removes any serious incentive to launch new products, build new technology or allocate meaningful marketing budgets to a jurisdiction where the economics no longer work.”
While some experts in the industry state that consolidation might be the best way to adapt to these changes, Hills believes that this would only make things worse rather than solving the issues:
“Larger operators may be able to absorb the short-term shock better than smaller firms, but even they cannot outrun the erosion of value that comes with a tax framework placing compliant operators at a fundamental disadvantage to the black market. A consolidated market means fewer choices for consumers, less competition, and a slower pace of innovation and technological progress. It does not fix the underlying distortion between the regulated and unregulated sectors.”
Ireland Poised to Be The Next Big Market
As online gambling companies reevaluate and reconsider their options outside the UK, some turn to other jurisdictions to reach a balance between user protection and profitability. In this context, Ireland appears as a solid alternative, as the country just released the Gambling Regulation Act and established the Gambling Regulatory Authority.
This couldn’t happen at a better time, as it presents gambling operators with a strong option that offers clarity and a regulatory culture that makes long-term planning and investment possible. For online casinos and operators, Ireland could be a valuable and strategic choice to achieve stability in a very unpredictable European environment.
A Bleak Perspective With Negative Consequences
Experts in the industry warn that this new tax regulation for online casinos will bring nothing but trouble, as it only affects and hurts regulated and legitimate betting operators. The black market of online gambling will not only remain largely unaffected, but it might also thrive, as it moves to fill a gap left by regulated betting companies.
These black market casinos don’t pay taxes, are not subject to any kind of regulation, and will probably become more and more attractive to British users as certified operators leave the country in search of greener pastures.
The bigger voices in the industry also warn that jobs will suffer, as marketing budgets will be shrunk or outrightly cut, while innovations in safety tools will slow down or halt due to a lack of viable incentives in the UK.
What Will the Future Hold for the iGaming Industry in UK?
The online wagering industry in the UK is living one of the most uncertain moments in its history, as the regulations, policies, and profits that made the UK one of the most prolific and profitable markets for online casinos will be largely invalid or non-existent in light of this controversial tax reform.
With an expected decline in investments, the regulated sector of the iGaming will be left irrelevant and diminished, while the black market of online gambling operators booms and grows. Time will tell if the government reconsiders its stance and allows for a higher degree of flexibility in tax fees, but right now, the future of the industry isn’t looking too bright in the UK.
