Industry Turmoil Grows After UK Unveils Sharp Tax Hikes on Digital Gaming

A sudden change in the UK’s gambling tax system has shaken up the betting industry, with big companies warning they’ll make less money, invest less, and might have to cut jobs. The new rules announced by Chancellor Rachel Reeves in her second budget make online gambling much more expensive for companies, but do nоt change things for betting shops on the high street.

Evoke and Entain Reel as Government Unveils Drastic Online Gambling Tax Increases

Starting next April, the tax on online casino products will shoot up from 21% to 40% — a much bigger increase than industry experts expected. Another change set for 2027 will bump up the tax rate on digital sports bets from 15% to 25%, but horse-racing bets and bets placed in physical shops will stay under the current system. The Treasury thinks this package will bring in over GBP 1 billion ($1.3 billion) a year by the end of the decade.

The news sparked quick chaos in the financial markets. Evoke, which owns William Hill and 888, watched its stock drop to prices not seen in over 10 years. The firm said the new rules will cause a GBP 125 million ($165 million) to GBP 135 million ($178 million) increase in its yearly taxes, leading bosses to ditch mid-range money goals and start cutting UK spending. Leaders hinted that many jobs could be on the chopping block once they begin to slash costs in earnest.

Entain, the company that owns Ladbrokes and Coral, gave a gloomy outlook, too. The company thinks it will lose about GBP 100 million ($132 million) next year and close to GBP 150 million ($198 million) starting in 2027. Company bosses said the new changes would make companies cut back on special offers and other perks for customers. They also said this might make people more likely to use offshore gambling sites that are not regulated. Entain plans to make up for some of the losses by saving money and changing how it operates, but it warned that the increased tax would still have a big effect overall.

New Levy Package Threatens Competitiveness, Flutter Says, Despite Relief for Other Sectors

Flutter, the company that owns Paddy Power, Betfair and Sky Bet, predicts the new taxes will cut its profits by hundreds of millions of dollars in the next two years. The company plans to reduce its marketing costs and find ways to save money to soften the impact. However, it believes the big tax hikes will make the industry less competitive.

Some parts of the gambling world got good news. Bingo halls will not have to pay the 10% tax anymore. The horse racing industry also dodged the tax increase it fought hard against. The people in charge of racing were happy about this.

However, they know that if bookmakers struggle, it could still hurt their sport. People who back the tax change say online betting with slot machines and digital casino games brings a higher risk to society and that tougher financial rules are long overdue. On the flip side, groups from the industry claim this move puts jobs at risk, weakens safeguards for customers, and makes it hard for smaller companies to survive when rules are already getting stricter across the board.