UK Government Ratifies Plans to Increase Online Gambling Taxes

The UK government has officially confirmed its intention to raise online casino and sports betting taxes, supporting the details that were confirmed by Chancellor Rachel Reeves in the Autumn Budget.

Initial changes just a few months away

Following months of speculation, Reeves confirmed in that November Budget that remote gaming duty, paid on online casino bets, will increase from 21% to 40% of gross profit from April 1, 2026.

This will be followed by a rise in general betting duty, which will go up from 15% to 25% of gross profit from April 1, 2027; bets on horseracing and in-person gambling will be exempt from this. Duty on bingo betting will be abolished from April this year.

While the changes were announced by Reeves, the Treasury Committee at that time could only recommend the increases to the government; the government has subsequently agreed with the recommendation.

The Treasury Committee, made up of 11 MPs, is appointed by the House of Commons to examine the expenditure administration, and policy of the Treasury, HM Revenue & Customs and its associated public bodies.

“Victory for common sense”

The government claims this will generate additional tax revenue of more than £1 billion per year. Dame Meg Hillier, Chair of the Treasury Committee, said:

“The decision by the Chancellor to use her Budget to increase taxes on online gambling is a victory for common sense.

"The Chancellor has made the right decision in agreeing with my Committee that the tax rate for remote betting, including highly addictive casino games, should reflect the harm it inflicts.”

Debate over “social ills”

In the government’s report confirming the changes, it said:

“We have sought to take a balanced approach with these reforms which form part of our ambition to create a fair, modern and sustainable tax system. It comes after the Committee rejected testimony from the industry that this type of betting causes no social ills.”

The reference to social ills could have been in response to comments made to the Committee in October by Grainne Hurst, CEO of industry body the Betting and Gaming Council (BGC), who denied that gambling creates “social harms.”

Hurst told the Committee:

“I think there are people who will have problems with their gambling, but that is 0.4% of the population. But I don’t think it’s right to categorise the gambling industry as creating social harms.”

Hillier responded strongly to Hurst’s claim at the time, stating:

“While I accept parts of the gambling industry make an economic and cultural contribution to the UK, I am frankly flabbergasted that representatives from the betting sector could not accept that certain forms of gambling, such as highly addictive online casino games, cause social harm for some people. I don’t believe that is a defensible position.”

BGC continues to speak out

The BGC, which represents more than 90% of retail betting shops, online betting and gaming operators, casinos and bingo operators, has made various statements attacking the tax increases, and often points towards how these changes will eventually push more players towards the black market.

Earlier this week, Hurst warned the betting industry is in a dangerous position with regards to its future. Hurst referenced analysis from Frontier Economics which shows up to 1.5 million people a year in Great Britain are already gambling on unlicensed sites, staking up to £4.3 billion a year on the black market; this research was commissioned by the BGC.

Hurst said:

“The Treasury’s decision to hike taxes on online betting and gaming is not just short-sighted but dangerous, particularly given the scale of regulatory reform the sector is already delivering in good faith.”