BGC CEO Denounces Budget as a ‘Massive Win’ For Black Market

The Betting and Gaming Council (BGC) have reacted furiously to the gambling contents shared by Rachel Reeves in her budget announcement. The Chancellor made sweeping changes to the industry yesterday, which saw Remote Gambling Duty (RGD) almost double from 21% to 40%, and it is predicted that the new rates will bring in an extra £1.1 billion for the Treasury by 2030.

While games of chance were punished, general betting duty paid on online sports betting was bumped from 15% to 25%. Horseracing was spared from the tax increases, but the budget speech sent shockwaves through the betting industry. And the BGC CEO Grainne Hurst didn’t hold back in giving her thoughts on the matter.

How did the BGC react?

In the run-up to the Budget, Hurst had voiced her fears over the threat posed by the illegal online gambling market. Indeed, she had suggested that the UK could go the same way as France, which has experienced significant black market growth (57%). And Hurst’s worst fears were realised.

In a statement, she said: “The Government’s Budget is a massive win for the incredibly, harmful, unsafe, regulated 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.”

Mixed performance for stocks

Following the announcement of the Budget, stock prices in the leading gambling companies dropped sharply. Shares in Flutter Entertainment, which owns Paddy Power, Betfair and Sky Bet, slid from £14.97 at the start of trading to £14.33 before rebounding to £15.02 at close.

Meanwhile, Entain, which owns Ladbrokes and Coral, saw shares dip from £7.47 to £7.06 before recovering to £7.73. Elsewhere, the abolishment of the bingo duty saw Gala bingo owner Rank’s share price climb by 10%, although the changes are reportedly likely to see them take a £40 million hit.

Worst fears revealed

Although the migration to the black market had prompted concerns before the budget was delivered, Hurst had repeatedly warned about the potential job losses that would stem from increased rates. She claimed the announcement will inevitably ‘undermine’ growth in the gambling sector, which has contributed over £6bn to the economy.

She added: “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.

“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.”

Dealing with the fallout

The tax rises introduced could lead to companies scaling back on marketing and advertising spends. Profit forecasts are set to be revised in the wake of the announcement. It has been noted that the higher tax rates will affect Flutter’s Earnings before Interest, Taxes, Depreciation, and Amortisation (EBITDA) by around £240m in fiscal year 2026 and £400m in fiscal year 2027.

Clearly, the impact will be felt by gambling companies in the short to medium term. It will therefore be fascinating to see how they absorb the blow and turn things around in the future.