Gambling operators and industry organisations across the UK market have blasted the government over its decision to introduce increased tax rates for the sector, with several major businesses voicing their concerns over the long-term impact of higher taxes.
Tax rises were confirmed by the Office of Budgetary Responsibility and set out in parliament by Chancellor Rachel Reeves during the autumn budget announcement on 26 November.
Among the gambling-specific changes was a hike in remote gaming duty from 21% to 40%. A new general betting duty for remote betting will also be introduced in April 2027 at 25%, up from 15%. However, this only covers online betting profit and excludes self-service betting terminals, spread betting, pool bets and horse racing bets.
The new tax rates will come into effect from the start of the next financial year in April 2026.
Unsurprisingly, the response from the industry has been negative and highly critical. Main concerns include how the new rates will impact investment in the industry, with potential job cuts on the horizon. There were also worries over the future financial performance of operators and a potential rise in black market gambling.
Tax rises will ‘significantly’ harm UK industry
The overall consensus was that higher tax will have a negative impact on the UK market. Betting and Gaming Council CEO Grainne Hurst said the new, “excessive” online tax rates will undermine jobs, investment and growth.
“Massive tax increases for online betting and gaming announced in the budget make them among the highest in the world,” Hurst said. “They’re 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.”
Per Widerström, CEO of Evoke, also raised concerns about the impact the tax rise will have on the UK market. He said the increases are “highly damaging” for the UK economy and players.
“As an industry, we have consistently warned of the significant impact on jobs, investment in the UK and player protection that these changes would have,” Widerström said. “Yet sadly the government chose not to listen. Proposals are ill-thought-through, counterproductive and highly damaging. It is clear these changes will significantly harm businesses, employees and customers.
“As a result of the actions now required, these tax changes will reduce the overall level of tax the regulated industry pays in the UK and, more importantly, it will have a significant negative impact on player protection as these changes will incentivise activity moving to the illegal and dangerous black market.”
Stella David, CEO of Entain, said she was “deeply disappointed” with the decision, saying it poses risks to the industry.
“Disproportionately increasing gambling taxes will not only have a detrimental impact on our industry but also heighten the risk for customers,” David said. “As seen in other countries, punitive tax increases often lead to lower tax revenues overall, while also driving players to illegal, unregulated operators with no player protections.”
‘Robust’ enforcement must accompany tax rate
Super Group, which owns the Betway brand, was a little more positive in its assessment. CEO Neal Menashe said that the higher rates could be “reasonable” if accompanied by “robust and strict enforcement” in terms of black market activity.
“Super Group supports the reasonable taxation of online gaming in the UK,” Menashe said. “We rely on the government to ensure the very substantial increase should be paired with robust and strict enforcement against non-paying offshore operators. This is essential to protect the regulated sector’s investment in jobs, technology and responsible gaming in the UK.”
Elsewhere, Rank Group took the budget with mixed emotions. While the online rise will hit its digital business, this impact will be partly offset by the abolition of bingo duty, which was also announced in the budget.
“The announced increase in remote gaming duty represents a very significant blow to the regulated betting and gaming industry in the UK,” CEO John O’Reilly said. “While we are pleased that the government has abolished bingo duty, which will help to sustain jobs and investment in the land-based sector, the far more significant impact on the group is the hit to digital profitability.”
Budget ‘slightly’ better than expected
Away from operators, several professional firms and analysts have also given their opinion on the budget. Deutsche Bank said the news was “slightly” better than first thought, given the reprieves for land-based gambling. It said the budget “improves” the near-term outlook for the UK gambling sector.
“From a company perspective, Rank looks to have emerged significantly better than expected,” Deutsche Bank said. “Entain and Evoke are also slightly better, albeit for the latter there remains concern over the resulting balance sheet/leverage.”
Meanwhile, Adam Rivers, managing director and global head of betting and gaming practice at Alvarez and Marsal (A&M), said while the budget was “painful” for the online sector, not all business models have fared badly.
“Scrapping bingo duty and holding machine gaming duty steady gives land-based bingo operators some breathing space, helping venues that still matter to many communities stay on the high street and supporting the wider hospitality sector.”
How will operators cope with tax rise?
Looking ahead, some operators published forecasts as to how higher tax will impact their financial performance. They also detailed some of the measures they are putting in place to offset additional tax costs.
Super Group CFO Alinda van Wyk estimated an impact of approximately 6% to 2026 group adjusted EBITDA. However, the group has several mitigation levers in motion that are intended to offset the tax impact.
“Our strategy remains unchanged: sustainable growth and disciplined capital allocation,” van Wyk said. “We don’t expect the news to alter our long-term trajectory nor our capital return priorities.”
Entain’s David also offered insight into how the business will cope with the higher tax rate. She said it will mitigate approximately 25% of this impact through actions including reducing marketing and promotions. Consistent with the dates of proposed implementation, this equates to an EBITDA impact of approximately £100 million in 2026 and £150 million from 2027.
In addition, David hinted that Entain would likely pick up more UK-based players. This would come as other, smaller operators are forced to exit the market due to the higher tax rates.
‘Thousands’ of jobs set to be cut
Evoke’s Widerström also offered insight into potential mitigation steps. Approximately 50% of higher tax costs will be mitigated in the medium term. This includes through supplier savings, reduced marketing, retail store closures, operating cost savings and potential changes to the customer proposition.
Widerström added that Evoke will begin immediately to execute these mitigation plans, with redundancies set to be part of this approach. He said: “This will involve a significant reduction in investment into the UK and, very regrettably, the likely need for thousands of jobs to be cut up and down the country.
With Rank, the group said it expects an additional duty cost of £46 million on its UK digital business. However, this will be partly offset by the abolition of bingo duty. Rank also noted the impact of the 4.1% rise in the hourly National Minimum Wage to £12.71. It said this will represent an additional cost impact of approximately £5.5 million.
Some positivity over future financial prospects
Flutter UK and Ireland CEO Kevin Harrington was also among the voices of concern over the mooted changes. However, in terms of Flutter’s future performance, he remained optimistic.
Harrington said direct first order mitigation, including reduced operational, promotional and marketing spend, will be approximately 20% of gross impact during the first six months after implementation, rising to 40% thereafter. As such, net impact on adjusted EBITDA for FY2026 would be approximately $235 million and $339 million in 2027.
“Despite this impact, I am confident that through both our scale and leading position in the UK, as well as the proactive cost initiatives that we are taking, we are well placed to navigate through the changes,” he said.
Playtech also issued a statement acknowledging the increases. It said that impact in group adjusted EBITDA for 2026 would be in the “high-teens millions of euros” before mitigation. However, it added that its operations outside the UK would help offset these declines.
“Given the group’s geographic diversity across regulated markets and strong performance and prospects outside of the UK, Playtech remains comfortable that it can meet market expectations for the full year 2026,” Playtech said.
Enlarged black market argument remains
The underlying theme was the impact the rise in tax will have on black market gambling. In the lead up to the budget, industry voices raised concerns about growth among unlicensed operators after tax rises.
The BGC’s Hurst said these concerns will now be realised. She said: “The budget is a massive win for the incredibly harmful, unsafe, unregulated gambling black market, which pays no tax and offers none of the protections that exist in the regulated sector.”
Flutter’s Harrington agreed, saying the increases hand a “big win” to unlicensed operators, who will become more competitive overnight. He said: “These black market operators don’t pay tax and don’t invest in safer gambling. At 40%, the UK’s remote gaming duty is now above countries such as the Netherlands, where a recent tax increase saw a rise in illegal gambling and a fall in government receipts.”
Regulus echoes black market concerns
Regulus was of a similar mindset. Analysts said the expected reduction in bonuses – as operators seek to mitigate the costs on the tax rises – will drive more players to unlicensed sites, which may offer more bonuses and promotions. With this, it said as much as £2.5 billion in gross gaming revenue could flow into the black market.
“The idea that people are going to gamble less because the licensed sector does not offer bonuses, has a slowly worsening offer due to a lack of profits to invest, or because the Gambling Commission has another £26 million ‘to tackle the illicit market’ is naïve at best,” Regulus said. “Instead, around £2.5 billion of GGR will flow directly into the black market, as is already happening on a smaller scale due to other regulatory interventions.
“The black market therefore gets to fill the vacuum of cuts in marketing, product and operating expenditure in the licensed sector – meaning its product will be better, stand out and will be sought out.”
Remote gaming duty will rise from 21% to 40%, with general betting duty increasing from 15% to 25%.