Chancellor Rachel Reeves has hit the UK gambling industry with a sweeping revision of its tax obligations which will see online gambling rates increase to as much as 40%.
The industry had been bracing itself for a gambling tax hike in Reeves’ 2025 Budget and the Labour minister has not held back.
Among the new legislation, Reeves has introduced the following:
- Remote Gaming Duty for online games of chance such as casino games will increase from 21% to 40%.
- Duty for online betting will increase from 15% to 25%.
- There will be no changes to taxes for ‘in person’ gambling or to horse racing.
- Bingo duty will be abolished entirely from April of next year.
After announcing these revisions, Reeves said: “Taken together, my reforms to gambling tax will raise over £1 billion per year by 2031.”
What Will This Mean For Online Casino Players?
Gambling tax in the UK is the responsibility of the gambling companies, not the players, so any winnings will remain exempt from tax.
That’s the good news.
Longer term though, the industry will look to claw back costs from somewhere to cover its increased tax liabilities.
In real terms that could mean online operators reducing the levels of bonus offers available within existing games and also when promoting newly launched games.
That would also hit welcome bonuses and other incentives such as free bets.
At the start of November, the UK’s Betting & Gaming Council released a report saying a betting tax hike could severely affect odds and payouts that legislated gambling companies would be able to offer, again reducing potential winnings for players.
Sadly, with any business facing increased costs, it is usually the customer who ends up bearing some of the burden.
Industry Warning Of Job Loses And Shop Closures
Talk of a proposed change in UK gambling tax appeared over the summer with two consultation groups suggesting it was a way of raising government funds to tackle social issues.
The Institute for Public Policy Research was in favour of introducing two raised gambling tax levels of 25% and 50%, a policy which would generate an estimated £3.2 billion.
A further paper supplied by the Social Market Foundation suggested online tax reform could raise £2 billion if Remote Gaming Duty was increased from 21% to 50%.
Industry reaction was swift and damning.
Fred Done, Chairman and co-founder of Betfred, fired a warning that 7,500 jobs would be at risk if tax rates increased, while Flutter-owned Paddy Power said their recent shop closures could be the first of many for the UK betting trade.
Entain, the owner of UK betting giants Ladbrokes and Coral said a gambling tax rise could lead to high street betting shop closures affecting its estate of 2,300 retail outlets.
There were some pre-emptive actions taken by some, with Sky Bet and William Hill making financial moves under the cloud of a UK gambling tax hike.
Sky Bet’s parent company Flutter has relocated the UK sportsbook’s headquarters from London to Malta, which it is estimated could sae the firm up to £55 million in UK tax payments.
William Hill announced it was to close online operations in 13 countries across Africa, Latin America and Asia from December 2.
How Was The News Delivered?
Reeves held the revisions to the UK gambling tax laws until the end of her Budget announcement.
Concluding a section on taxes in general, she said: “I will also reform gambling taxes in response to the rise in online gambling.
“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 on horse racing.
“And I am aboloshing bingo duty entirely from April next year.
“Taken together, my reforms to gambling tax will raise over £1 billion per year by 2031.”
