Steep increases for online gambling tax to address ‘highest levels of harm’

The Chancellor has announced a steep increase in online gambling tax associated with the “highest levels of harm” across the sector.

Rachel Reeves said she was reforming gambling taxes in response to the rise in online gambling, announcing an increase in remote gaming duty from 21% to 40% and on online betting from 15% to 25%.

There are no changes for in-person gambling or horse racing, while bingo duty is being abolished entirely from April next year.

The Chancellor said: “Remote gaming is associated with the highest levels of harm and so I am increasing remote gaming duty from 21% to 40%, with duty on online betting increasing from 15% to 25%.

“I am making no change to the taxes on in-person gambling or horse racing and I am abolishing bingo duty entirely from April 2026. Taken together, my reforms to gambling tax will raise over £1 billion per year by 2031.”

The reforms are expected to raise an estimated £1.1 billion for the Government by 2029-30.

Betting and Gaming Council chief executive Grainne Hurst said: “Massive tax increases for online betting and gaming announced in the Budget make them among the highest in the world, and are 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.

“Regulated betting and gaming is one of the UK’s few globally successful sectors, generating £6.8 billion for the economy, contributing over £4 billion in tax and supporting 109,000 jobs, while delivering vital funding for British sport.

“While we welcome the decision not to raise land-based duties and to scrap bingo duty, these excessive online tax increases will undermine jobs, investment and growth across the UK.

“The Government’s 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.

“These decisions are bad for jobs, bad for customers, bad for sports and bad for safer gambling.”

Treasury Select Committee chairwoman Dame Meg Hillier said: “The gambling sector’s scaremongering has failed.

“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.

“Some parts of the gambling industry, such as racecourses and bingo halls, make a cultural contribution to our country.

“This is not the case, though, for online slots and other remote gaming which can quickly drain the bank balances of vulnerable people after just a few clicks of a button on a phone.”

The Budget announcement comes the day after the gambling regulator released official figures showing the industry made £16.8 billion from consumers in the year to March after paying out any prizes – up 7.3% on the year before.

The Gambling Commission said the latest annual industry statistics, which report on the customer-facing gambling industry in Great Britain, showed the rise in “gross gambling yield” (GGY) was largely driven by online gambling, which had gone up by more than £900 million to an annual figure of £7.8 billion.

Two influential think tanks, the IPPR and SMF (Social Market Foundation), had both recommended that RGD (remote gaming duty), applied to online games of chance and the largest of the duties because it is charged on the fast-growing online sector, should be more than doubled to 50%.

Companies and industry groups have warned that steep increases in levies could push punters on to the black market while threatening jobs and investment, drive consolidation among smaller operators and force them to streamline their businesses or shut down altogether.