The UK Revenue and Customs Department has just announced a tax hike on remote gambling and sports betting operations. The updated duty will take effect on online slots and casino games starting April 1, 2026. Horse racing operators will continue paying 25% in levy, while the General Betting Duty will increase from 15% to 25% on April 1, 2027, the government confirms.
Quick Overview of the UK Remote Gaming Duty Hike
- The Remote Gaming Duty will increase from 21% to 40% starting April 1, 2026. The General Betting Duty will increase from 15% to 25%, effective April 1, 2027. Bets placed via self-service terminals will continue to attract a 15% tax.
- Horse racing operators will contribute 10% toward the statutory Horserace Betting Levy in addition to the 15% General Betting Duty, effectively paying 25% to the state. The government will abolish Bingo Duty starting April 1, 2026.
- The government has estimated that increasing gambling taxes will generate an additional £1 billion annually. The government plans to use the funds to support public finances and create a fair, transparent, and sustainable tax system.
Government Proposes Tax Hike to Curb the Proliferation of Online Gambling
The UK Revenue and Customs Department announced changes to existing tax brackets on Wednesday, November 26. Remote gambling operators will pay 40% as Remote Gaming Duty, instead of the current 21%, starting April 1, 2026. The government will also introduce a new General Betting Duty on April 1, 2027.
Operators will pay a 25% levy on all remote betting activities except for horse racing, which will remain unchanged in accordance with land-based gaming duties. Apart from the 15% betting duty, horse racing wagers will attract an additional 10% Horseracing Betting Levy, effectively increasing the total contribution to 25%.
Remote gaming is popular in the region, and players are pretty active at online casinos in Ireland. Lawmakers believe that increasing taxes will help generate additional funds to offset the proliferation of black-market gaming activities. According to official estimates, the state will raise an additional £1 billion annually, which will be used for public benefit.
Lawmakers have not increased the gaming duty on all verticals. Bets placed via self-service terminals at licensed betting venues will be treated as land-based gaming and continue to attract a 15% tax. The General Betting Duty on horse and dog pool bets and non-financial spread bets remains unchanged. The government will also abolish Bingo Duty starting April 1, 2026.
Tax Hike Aimed at Reducing Player Affinity Toward Online Gaming
The latest tax hike targets online gambling, which generally has lower operational costs but is considered to be more dangerous to public health. The government seeks to discourage operators from incentivising consumers to engage in casino games, typically viewed as high-risk products.
Lawmakers have sought to balance evidence and views that remote betting is less harmful than remote gaming. They have also acknowledged that the operational costs of online casinos are lower than those of retail betting establishments. Therefore, the General Betting Duty has been kept lower than the Remote Betting Duty.
A statement from the Office for Budget Responsibility (OBR) noted that operators are expected to pass 90% of the additional tax burden to consumers, leading to a reduction in demand. It assumes that, over time, operators will restructure their products to offset the tax hike.
The OBR statement read:
The behavioural responses to these changes are uncertain but are estimated to reduce the yield by around one-third. We estimate that operators will seek to pass through around 90% of the duty increases by increasing prices or reducing payouts, leading to a reduction in consumer demand, which reduces the yield from the measure by £0.5bn by 2029-30. The elasticities used to estimate the demand effect also capture potential substitution to the illicit market and substitution between different forms of gambling due to the tax differentials introduced through this policy. We also assume that operators will, over time, restructure their product offering to minimise tax costs, given the policy creates wide differentials between rates across different forms of gambling, reducing the yield by a further £0.1bn.