A premature release from the UK’s Office for Budget Responsibility sent shockwaves through the UK gambling markets when documents showed that the government is preparing to impose a far harsher tax regime than anticipated. The leak revealed a remote gaming duty increase to 40%, higher than the 30–35% that most operators expected.
Operator Share Prices Took an Immediate Hit
The budget’s gambling-related measures envision a complete overhaul of remote gaming duty, which will surge from 21% to 40% in April 2026. Industry representatives insist that the increase is steep enough to push some online casino operators into the red, particularly those with thin margins or heavy marketing expenditures. While bingo duty will be abolished, the change offers little relief to operators facing a tax load nearly double what they pay today.
From April 2026, there will be an increase in remote gaming duty from 21% to 40% and abolition of bingo duty from its current 10% rate.
OBR statement
Immediately after the reveal, shares in Entain, Flutter, and Evoke dropped, with losses ranging from mild single-digit declines to nearly 20% for some firms. This slump happened even before the chancellor stepped up to deliver the budget, as investors were shocked by the scale of the changes nd the government’s admission that it expects consumer behaviour to change in ways that will dampen the hoped-for revenue boost.
The OBR’s briefing indicates that the Treasury seeks to raise GBP 1.1 billion ($1.46 billion) annually from the revamped gambling duties by 2029–30. That figure would be significantly higher if authorities did not expect the tax increase to drive bettors toward offshore sites or reduce activity altogether. Officials admitted the changes would cost about one-third of potential revenue as consumers seek options outside the UK.
The Move Could Have Wide-Reaching Consequences
The tax overhaul envisions additional changes in 2027, when a new general betting duty of 25% will come into effect. The rate will not apply to spread betting, pool betting, and horse racing, marking the culmination of months of efforts by the racing industry to secure a carveout. The existing duty rates for traditional casinos will be frozen for one year, and then return to their usual inflation-linked adjustments.
Industry representatives fear that the changes could lead to unintended consequences. They argue that taxing an industry that is already paying multiple layers of duty will lead to layoffs and push smaller companies out of business. Flutter’s Sky Bet has already moved its headquarters to Malta, a decision that could save tens of millions in future tax liabilities. Analysts predict that more relocations and potentially more mergers could follow.
The OBR believes that over time, operators will adjust their products to mitigate the impact of the taxes. For now, however, the sector is preparing for a tough transition. While a 40% tax is not the worst-case scenario floated in recent months, it comes perilously near. Boards and investors must now confront the unfortunate reality that the UK gambling market is about to shrink.