Chancellor Rachel Reeves’ Autumn 2025 Budget has delivered a punishing blow to the UK gambling sector as remote gaming duty jumps from 21% to 40% from April 2026, while remote sports betting duty rises from 15% to 25% in 2027.
These hikes, projected to raise £1.1 billion annually by 2029–30, are unnecessary, shortsighted, and risk pushing a mature and thriving industry to the brink.
Doubling taxes on profitable online segments ignores evidence: higher duties above 25% of GGR often fail to deliver proportional revenue, and PwC studies show markets with taxes over 25% experience slower growth while allowing the black market to surge.
The fallout has been predictable. Operators like Flutter and Entain warn of £300–500 million annual earnings hits, thousands of job losses (estimates suggest 15,000–17,000), and reduced investment.
Businesses will relocate to lower-tax jurisdictions like Malta (5–15%) or further offshore, eroding the UK’s £11.5 billion market. The big market players will surely stay and find ways to cut costs, but these tax hikes will destroy the existing smaller operators.
While you may see some new entrants or more online-focused companies try to pick up market share given more efficient corporate structures, it’s doubtful that the total tax rake from the government will increase.
Inevitably, this will drive gambling underground or offshore. Unregulated black and grey markets offer little to no responsible gaming tools, AML checks and/or age verification which expose vulnerable players to far greater harm.
Billions in bets will flow offshore, with the government potentially netting only half the expected revenue as punters flee to unsafe platforms. Players understand the offshore and crypto workarounds in this digital age and switching costs are minimal.
Players who remain loyal to the regulated companies will lose too: squeezed operators will slash return-to-player (RTP) rates from 95–96% to lower levels to stay viable, eroding payouts and trust. Aggressive marketing deals and cost-per-acquisition incentives will surge to offset margins, flooding consumers with promotions that could worsen addiction.
These tax increases mirror mistakes on my side of the pond as well. Pennsylvania’s 54% online slots tax, Illinois’ change of tax rates and per wager tax on sports betting and Delaware’s 57% on video lottery have fuelled black markets, operator consolidation, and offshore migration, yielding less revenue than projected while harming consumer protections.
Governments moving the goalposts
As the gaming industry is a huge target, governments constantly move the goalposts (in the UK – affordability checks, stake limits, now these hikes), which stifles regulated innovation and investment.
Instead, they should cap taxes at sustainable levels (around 25%), enforce statutory harm levies, and partner with operators for balanced reform. Governments should broaden the size of the market by allowing the innovation that occurs in the grey markets to have a pathway towards reasonable regulation, thus increasing competition and the overall size of the tax pool by providing constituents with what they want.
This tax grab won’t protect players or plug fiscal holes. It will kill jobs, enrich offshore operators and leave gamblers worse off. Evidence, not ideology, should guide policy. The UK deserves better than a gamble that everyone loses.
Evan Meyer, co-founder and managing partner at Astralis Capital Management, explains why the UK gambling tax rises could be catastrophic for the market.