Rank Group Expecting Cost Headwinds in H2 After Online Tax Increase

Coral has ended its sponsorship of the Cheltenham Festival, referencing upcoming tax Outgoing Rank Group CEO John O’Reilly said the operator will experience cost headwinds, primarily in its UK digital business, as a result of the first of two online betting tax increases being introduced in the coming months.

From April 1, 2026, remote gaming duty (RGD), paid on online casino betting, will rise from 21% to 40% of operators’ gross gaming yield (GGY).

There will also be a rise in general betting duty, paid on online sports betting, which will go up to 25% from 15% of GGY; bets on horseracing will be exempt from this increase.

While Rank Group is primarily associated with being a land-based operator via its ownership of Grosvenor Casinos and Mecca Bingo, it also operates online. O’Reilly was quoted in Rank’s H1 2025/26 report, covering the six months ended December 31, 2025.

The report showed the group’s underlying like-for-like (LFL) net gaming revenue (NGR) for the period increased 6% year-on-year to £419.8 million. Meanwhile, digital underlying LFL NGR went up by 8% to £123.7 million, but profit after taxation went down by 26% to £18.5 million.

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Ahead of the tax increases being announced by Chancellor Rachel Reeves in November, O’Reilly was quoted as saying Rank Group was already “paying its fair share” after paying local authorities £188 million in taxes the year prior.

Following the announcement of the changes, O’Reilly said the operator’s annual tax burden would increase by £40 million and that it would look to mitigate the impact where possible.

“Heavily disrupted landscape”

On January 6, Rank Group announced O’Reilly would be retiring from the position of CEO on January 29, making Thursday’s H1 report his last at the helm. Upon his departure, without stating explicitly where cutbacks could be made, O’Reilly made clear the operator will feel the pinch in the second half of the year.

O’Reilly said:

“The second half of the year will bring further cost headwinds, principally in our UK digital business, which will be impacted by the UK government's huge increase in tax rates. We have already executed measures to mitigate some of this impact, whilst continuing to prioritise customer experience, and the Group will respond with agility as a heavily disrupted landscape takes shape in the UK.”

Commenting on the impact of the tax more generally, Rank Group said:

“We anticipate the huge increase in the tax rate to lead to a significant rebalancing of the UK digital gambling industry, ultimately with fewer licensed operators and reduced competition.

"We will monitor and remain agile to wider macro-industry changes in H2 which will further inform our decision making around the level of promotional investment, performance marketing and customer incentives.”

A proposed tweak to the law

The tax increases were officially confirmed by the UK government earlier this month, as it agreed with the recommended increases put to it by the Treasury Committee. Ahead of the changes being implemented, Rank Group is calling for the terms of the changes to be tweaked so that gross gaming revenue is taxed as opposed to GGY.

Rank Group said:

“We will continue to urge the government to apply, at the next legislative opportunity, RGD (at 40%) on gross gaming yield, rather than gross gaming revenue (with the difference being the imputed revenue based on the market value of free bets/bonuses).

“We believe this change from the existing application will not only result in greater direct revenues for the Exchequer, but will enable the regulated, taxed and licensed market to compete more effectively with unregulated black-market operators who are undoubtedly the significant beneficiaries of the tax increase.”