The UK government has set the stage for one of the most significant shifts in gambling taxation in recent years, confirming that remote gaming duty will almost double from 21% to 40% beginning in April 2026. The decision, revealed when the Office for Budgetary Responsibility (OBR) published its autumn budget analysis ahead of schedule, places online gambling at the center of the Treasury’s revenue strategy. Alongside the steep rise in remote gaming duty, an additional restructuring of digital taxation will follow in April 2027 with a new 25% general betting duty applied specifically to online betting profits. The higher rate will not apply to spread betting, pool betting or horseracing, and wagers placed at self-service betting terminals will be exempt.
New Tax Structure Alters the Landscape for Remote Operators
The government expects the combined measures to generate substantial additional revenue. According to official projections, the changes will raise £4 billion in 2025-26, with receipts increasing to £5 billion the following year and reaching an extra £1.1 billion annually by 2029-30. However, the Treasury also anticipates behavioural reactions: operators are expected to pass on as much as 90% of their increased duty costs to consumers, which is forecast to suppress demand and reduce the long-term yield by £500 million.
This restructuring follows months of consultation. Earlier in the year, HM Revenue & Customs and the Treasury proposed consolidating the current three-tier system — remote gaming duty, remote betting duty and gaming machine duty — into a single framework. Industry groups warned that any major increase in remote betting duty would hit the retail and horse racing sectors especially hard. Various think tanks entered the debate and argued for even higher rates, with some recommending remote gaming duty be raised to 50%.
The Treasury Select Committee subsequently examined potential tax formats and questioned operators and think-tank experts about the relationship between gambling taxes and problem gambling. Its report ultimately recommended taxing gambling verticals based on their relative risk levels — a principle reflected in the government’s final package. The chancellor, Rachel Reeves, emphasized this approach when presenting the Budget to Parliament, stating that remote gambling is linked to “the highest levels of harm” and would therefore face the sharpest increase.
Racing Spared While Bingo Duty is Removed
While remote operators face unprecedented fiscal pressure, land-based betting and horseracing received clear protection. The Budget confirmed that in-person betting duty will remain unchanged, while Horseracing Betting Duty stays at 15%. Bingo duty — long criticized for squeezing margins at a time of declining footfall — will be abolished from April 2026, and casino gaming duty bands will stay frozen for 2026–27.
Racing bodies welcomed the government’s decision to shield the sector. British Horseracing Authority Acting Chief Executive Brant Dunshea said:
“Today’s welcome outcome demonstrates that the Chancellor has listened to our concerns and rightly recognised that racing is a unique national asset culturally, socially and economically, and we welcome this support.
Betting on racing is an integral part of the enjoyment of our sport, and maintaining the rate of horserace betting duties is an important step by the Government to help preserve revenue streams and protect the 85,000 jobs supported by the racing sector across the country.
Racing has been part of the British way of life for hundreds of years. It binds our communities together through shared experience, brings joy to millions, and puts the country on the world stage. It is right that the Government has understood this and acted accordingly.
At the same time, we recognise that the increase in general taxation on the betting industry may have trickle-down effects on racing. We will work with our partners in the betting industry to understand the implications of this, and how we can work together to ensure that British horseracing continues to thrive.”
Others across the racing ecosystem echoed the sentiment. The Racecourse Association praised the exemption but warned that wider budget changes still pose challenges. Arena Racing Company said it prevented a “serious structural blow” to the sector, while the National Trainers Federation described the outcome as a relief, noting that the sport “lives to fight another day.” The Jockey Club also welcomed the clarity and emphasized racing’s cultural and economic significance.
Industry Response and Economic Fallout
The reaction from gambling operators was swift and severe. Shares across the market fluctuated sharply as firms issued profit warnings and outlined cost-cutting plans even before the Budget speech had concluded. Flutter Entertainment plans to reduce costs by 20% within six months of the new duty coming into force, rising to 40% thereafter. Evoke Holdings, which owns William Hill and 888, withdrew its medium-term targets and is reportedly considering divesting its Italian assets after estimating that annual duty costs will reach £125–£135 million. Rank Group projected a £40 million hit but saw its share price climb due to the abolition of bingo duty.
Entain, operator of Ladbrokes and Coral, warned of roughly £200 million in additional annual costs and said it was “deeply appalled” by the fiscal changes, which it expects will cut underlying profit by £150 million by 2027. The Betting & Gaming Council said the measures were a “devastating hammer blow to tens of thousands of people working in the industry,” and argued that increased taxation “is a massive win for the incredibly harmful, unsafe, unregulated gambling black market.”
The government acknowledged potential migration toward illicit operators and allocated £26 million over three years to the Gambling Commission to strengthen enforcement efforts.
Across the London Stock Exchange, the sector saw more than £8 billion wiped from market capitalisation on Budget day, fuelling questions about whether the Treasury’s revenue projections can withstand potential player displacement.
Source:
Online betting firms to pay billions more in UK tax, Reeves confirms, theguardian.com, November 26, 2025.
