The UK government announced substantial changes to the gambling duty regime in the Autumn Budget, aiming to raise additional revenue and to address social harm, though at the cost of greater complexity. Rather than harmonising existing rules, the government has opted to sharply increase duty rates on gambling activities considered especially harmful. Legislation will be introduced in Finance Bill 2025-26 to implement these changes.
Gambling duties apply to entities providing gambling services to UK individuals and, since 2014, have been payable regardless of where the business is located. There are currently seven separate duties, reflecting the UK’s long and complicated relationship with gambling and the difficulty of designing a single tax to cover all forms of gambling. Instead of consolidating these duties into a single tax, the government is amending several of them.
A consultation document released in Spring 2025 suggested reform, in particular, harmonising the treatment of online betting and online games of chance. This triggered intense lobbying from industry groups, public health advocates and think tanks, with even former Prime Minister Gordon Brown weighing in. Ultimately, the government abandoned harmonisation in favour of a model that taxes gambling based on its perceived social harm, while ensuring revenue generation.
The current rate of General Betting Duty of 15% of a bookmaker’s profits will rise to 25% for online bets from 1 April 2027, except for UK horse racing, which will remain at 15% even when bets are made online. Bets placed in-person in betting shops will remain taxed at 15%, as will Pool Betting Duty (on bets where the pay-out is not fixed), even when made online. The rule changes will create some oddities: the same bookmaker will face different rates depending on whether a bet is made online or in person and the location of a horse race will determine the duty rate. It is also possible that operators may develop new products in reaction to these changes.
On 1 April 2026, the Remote Gaming Duty rate of 21% will jump to 40% for online games of chance. This is a sizeable increase, though not entirely unexpected given the recent public debate. Online gaming is widely viewed as one of the most socially harmful forms of gambling and the new tax rate could lead to market exits by some operators. If the higher rate reduces online gaming, the government may consider that a success, but if it drives growth in the black market, the outcome could be far less desirable.
HMRC have also promised further guidance on freeplays and other promotional offers following recent court cases, which will become even more relevant at the nearly doubled tax rate.
The 10% Bingo Duty will be abolished as from 1 April 2026, reflecting the government’s view that bingo is relatively low harm activity and that more effective revenue can be gathered from taxing online gambling.
Gaming Duty, levied on land-based casinos, will remain as it was (albeit with thresholds not increased by inflation), as will Machine Gaming Duty (paid on gaming via physical machines) and Lottery Duty (paid by the National Lottery only).
The above changes represent the most significant shake-up of gambling taxation in the UK since the 2014 place of supply rule changes that brought offshore operators within scope. It should be a top priority for anyone in the sector, whether directly contracting with gambling customers or operating within the wider ecosystem.
Chris Evans
BDO in United Kingdom
Gambling duties apply to entities providing gambling services to UK individuals and, since 2014, have been payable regardless of where the business is located. There are currently seven separate duties, reflecting the UK’s long and complicated relationship with gambling and the difficulty of designing a single tax to cover all forms of gambling. Instead of consolidating these duties into a single tax, the government is amending several of them.
A consultation document released in Spring 2025 suggested reform, in particular, harmonising the treatment of online betting and online games of chance. This triggered intense lobbying from industry groups, public health advocates and think tanks, with even former Prime Minister Gordon Brown weighing in. Ultimately, the government abandoned harmonisation in favour of a model that taxes gambling based on its perceived social harm, while ensuring revenue generation.
Betting
The current rate of General Betting Duty of 15% of a bookmaker’s profits will rise to 25% for online bets from 1 April 2027, except for UK horse racing, which will remain at 15% even when bets are made online. Bets placed in-person in betting shops will remain taxed at 15%, as will Pool Betting Duty (on bets where the pay-out is not fixed), even when made online. The rule changes will create some oddities: the same bookmaker will face different rates depending on whether a bet is made online or in person and the location of a horse race will determine the duty rate. It is also possible that operators may develop new products in reaction to these changes.
Gaming
On 1 April 2026, the Remote Gaming Duty rate of 21% will jump to 40% for online games of chance. This is a sizeable increase, though not entirely unexpected given the recent public debate. Online gaming is widely viewed as one of the most socially harmful forms of gambling and the new tax rate could lead to market exits by some operators. If the higher rate reduces online gaming, the government may consider that a success, but if it drives growth in the black market, the outcome could be far less desirable.HMRC have also promised further guidance on freeplays and other promotional offers following recent court cases, which will become even more relevant at the nearly doubled tax rate.
Other
The 10% Bingo Duty will be abolished as from 1 April 2026, reflecting the government’s view that bingo is relatively low harm activity and that more effective revenue can be gathered from taxing online gambling.Gaming Duty, levied on land-based casinos, will remain as it was (albeit with thresholds not increased by inflation), as will Machine Gaming Duty (paid on gaming via physical machines) and Lottery Duty (paid by the National Lottery only).
BDO Perspective
The above changes represent the most significant shake-up of gambling taxation in the UK since the 2014 place of supply rule changes that brought offshore operators within scope. It should be a top priority for anyone in the sector, whether directly contracting with gambling customers or operating within the wider ecosystem.Chris Evans
BDO in United Kingdom