On 26 November, the UK government, with Chancellor Rachel Reeves at the helm, confirmed a series of tax hikes for the gambling industry as part of the autumn budget. The Office of Budgetary Responsibility outlined that the remote gaming duty is set to increase from 21% to 40%. Additionally, a new general betting duty for remote gambling is slated for introduction in April 2027, rising to 25% from the current 15%. These changes, however, will not affect self-service betting terminals, spread betting, pool bets, and horse racing bets. The new tax rates are scheduled to take effect at the start of the financial year in April 2026.
Industry response has been overwhelmingly negative, with operators and organizations voicing their concerns about the long-term ramifications of such steep tax increases. The primary fears revolve around reduced investment in the sector, potential job losses, and a shift towards black market gambling as operators struggle to maintain profitability under the new regime.
Grainne Hurst, CEO of the Betting and Gaming Council, argued that these “excessive” tax rates would severely impact jobs, investment, and growth in the sector. “Massive tax increases for online betting and gaming place our industry among the highest taxed worldwide,” she lamented, noting the devastating effects on tens of thousands of industry workers and millions of betting enthusiasts.
Evoke CEO Per Widerström also highlighted the detrimental effects on the UK economy and players. He pointed out that the industry had consistently warned the government about the significant negative impact on jobs and investment, as well as player protection. Yet, these warnings fell on deaf ears. Widerström cautioned that the new tax measures would not only reduce the overall tax revenue from the regulated industry but also drive gambling into the unregulated black market.
Entain’s CEO, Stella David, expressed her deep disappointment, suggesting that disproportionately high gambling taxes would not only harm the industry but increase risks for consumers. Drawing parallels with other countries, she noted that punitive tax increases often lead to decreased overall tax revenues and a surge in illegal, unregulated gambling with no player protections.
However, a slightly different perspective was offered by Neal Menashe, CEO of Super Group, which owns the Betway brand. Menashe posited that while higher tax rates could be “reasonable,” they must be paired with “robust and strict enforcement” against black market activities. He emphasized the importance of government action to protect the regulated sector’s contributions to jobs, technology, and responsible gaming in the UK.
The Rank Group presented a mixed response to the budget. While acknowledging the adverse impact on its digital business due to the increased remote gaming duty, it welcomed the abolition of bingo duty, which could sustain jobs and investments in the land-based sector. CEO John O’Reilly described the budget as a double-edged sword, highlighting the significant blow to digital profitability despite gains elsewhere.
Turning to financial analysts, Deutsche Bank suggested the budget was “slightly” better than anticipated, particularly with the reprieve for land-based gambling. They noted that Rank emerged better than expected, which could improve the near-term outlook for the UK gambling sector.
Adam Rivers, managing director and global head of betting and gaming practice at Alvarez and Marsal, acknowledged the budget’s “painful” implications for the online sector but pointed out that not all business models were adversely affected. He noted that eliminating bingo duty and maintaining steady machine gaming duty provided land-based bingo operators with some relief, supporting venues integral to community life.
As operators brace for the new tax regime, many have put forward strategies to mitigate the fiscal impact. Super Group CFO Alinda van Wyk estimated a 6% impact on the group’s adjusted EBITDA by 2026. However, the company remains committed to sustainable growth and disciplined capital allocation, with strategies in place to offset tax costs.
Entain has outlined measures to mitigate approximately 25% of the tax impact through reduced marketing and promotions. This equates to an EBITDA impact of around £100 million in 2026, rising to £150 million in 2027. David hinted that Entain might capture a larger share of UK-based players as smaller operators exit the market.
Evoke, according to Widerström, plans to mitigate around 50% of the higher tax costs through supplier savings, reduced marketing, retail closures, and operational cost reductions. Unfortunately, this restructuring is likely to result in significant job cuts across the country.
Rank anticipates an additional £46 million duty cost on its UK digital business, partly offset by the abolition of bingo duty. The group also highlighted the financial implications of a 4.1% rise in the National Minimum Wage to £12.71, estimating an added cost of approximately £5.5 million.
Despite the challenges, some operators remain optimistic about future financial prospects. Flutter UK and Ireland CEO Kevin Harrington, although concerned about the tax changes, expressed confidence in navigating the new landscape through strategic cost initiatives and by leveraging Flutter’s scale and market position.
Playtech acknowledged the tax increases, estimating a “high-teens millions of euros” impact on group adjusted EBITDA for 2026 before mitigation efforts. However, it emphasized that its operations outside the UK would help offset these declines.
One of the most contentious issues surrounding the tax increase is the potential growth of the black market. The BGC’s Hurst warned that the budget would empower unregulated operators, devoid of tax obligations and player protections. Flutter’s Harrington echoed these sentiments, noting that black market operators would become more competitive, particularly as the UK’s remote gaming duty surpasses other countries like the Netherlands.
Regulus analysts predicted that a reduction in bonuses, as operators seek to cut costs, would drive more players to unlicensed sites offering better incentives. They estimated that as much as £2.5 billion in gross gaming revenue could shift to the black market, filling the void left by cuts in marketing, product, and operational expenditures in the licensed sector.
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