Gambling Tax Hike in UK 2025 Budget: What Players Need to Know

The UK’s 2025 Budget decision is set to rock the iGaming industry, nearly doubling remote gaming duty and adding considerable taxation to online sports bookies. UK based operators, larger international multi-partner brands, and players are all going to be hit by the changes. It is all done to free up £1.6 billion for the UK government, but that is not a given either.

Some analysts reckon that potential shifts in the market could even damage the UK treasury forecast, only reeling in £800 million in revenues instead of the proposed £1.6 billion in tax receipts. Here, we will analyze the winners, the losers, and how the overall UK iGaming and sports betting market may react. Already, industry leaders have hit back at the proposals, concerned by the potential reduction in quality, staff reductions, and lost traffic to the UK’s black market.

Autumn Budget Taxation Changes

Gambling duty in the UK is separated into a number of sectors, including remote and general duties. The Autumn Budget also announced a new sector: Remote Betting Duty, which encompasses all online sports betting except for horse race betting. The new levies, announced in the Autumn Budget on November 26, included a sweeping hike on the remote gaming duty. This will affect virtually all online casino games, instant win, bingo rooms and slots. All UKGC licensed sites will have to now prepare for the new tax, which will go into effect from next year and onwards.

• Remote Gaming Duty: Rise from 21% to 40%. From April 1, 2026
• Remote Betting Duty (New Category): Rise from 15% to 25%. From April 1, 2027
• General Betting Duty: Stays at 15%
• Bingo Duty: Abolished, used to be 10%. From April 1, 2026

Main Parties Affected

The UK’s Autumn Budget primarily targeted UK online casinos and mobile UK betting sites. Online casinos will have their taxation nearly doubled, from 21% to 40%, which will seriously impact their products. UK sports betting sites will also have to amend their financial framework with the 25% new tax rate, and this could hugely impact their final offering.

H2 Gambling Capital, a respected consultancy agency that is also one of the best data resources for the industry, reckons it will lead to serious changes in what you get as a consumer. From bonus structures and percentages to the quality of the betting odds.

The H2GC calculated a 25% bonus rate for the small operators compared to the 12% offered by larger brands, with greater visibility. Bonuses are one of the best incentives these operators can use to attract new players. Advertising campaigns against well-known brands with massive reputations is extremely competitive and it doesn’t always pay off. But with the cuts, a lot of smaller operators don’t have the financial means to absorb the duty pressures. It could impact the juice at sportsbooks, bonus offers, services and features, and even the types of games a casino offers.

Who Escaped or Benefited from the Changes

The new laws are good for bingo operators, who run physical bingo halls such as Mecca Bingo, Buzz Bingo and Club3000, among others. Bingo, while historically popular, has been in a slow decline and the Autumn Budget gambling tax reforms are set to give these operators a lifeline. Another sector that escaped the hikes was the UK’s horse racing betting industry. Horse racing, which relies heavily on the proceeds from general and remote betting duty, did not receive a tax hike at landbased betting venues.

The British Horseracing Association heavily criticized any potential changes, even going as far as to stage a 1-day protest against any tax hikes. But fortunately, they will keep the same duty rate, and so the industry will not suffer as a result. Plus, it was exempt from the new Remote Betting Duty category, so online horse racing bets will also have the 15% rate.

Landbased casinos will keep the same duty bands, as will machine games duty – including landbased terminals and betting terminals. In anticipation of the worst, many UK high street betting shops closed, as a means for the main partners and brands to cut costs ahead of the 2025 Budget. It even prompted Flutter to relocate SkyBet to Malta, to mitigate overheads, workforce and other costs of operating out of the UK.

Treasury Revenue Expectations

The Treasury expects £1.6 bn in gambling tax revenue per year, compared to gambling data that suggests they will only make half that

The UK Treasury aimed to free up £15 billion from the tax measures and efficiency savings, of which an estimated £1.6 billion per year would come from gambling tax hikes. Gambling alone would account for just over 10.6% of the fiscal headroom, according to the Office of Budgetary Responsibility.

It is not an unrealistic expectation, but the Treasury automatically assumes that the traffic and interest in licensed iGaming sites and platforms will continue to grow at the rate they are. They made their calculations on forecasts based on the organic growth, consistent player wagers, hold percentages, and gross gambling yield figures. Insiders, however, are far more pessimistic about the changes. They reckon that further down the line, as the taxes are implemented and operators are forced to diminish the quality of their products, players will turn to the UK’s black market.

Pessimistic Insider Forecasts

The average UK casino gamer or sports bettor is probably not that interested in remote gaming duty rates, operational costs and behind-the-scenes movements in the iGaming world. But when there are changes that impact their favourite slots, preferred table games, or their sports bets, then the market reacts. And public sentiment can greatly impact the GGR of the UK’s sports betting and casino gaming platforms.

A study by H2GC estimated that, given the new static costs and player behavioural effects, the £1.6 billion estimate is probably double what the UK can expect in the fallout of the budget. They predict a £800 million yearly forecast, which would rise up to £1.2 per year by 2030. Their statistics accounted for the following changes in the market:

• Online sports betting bonuses to fall from 8% to 5% of GGR
• iGaming bonuses to fall from 16.8% to 7.3% of GGR

It went on to calculate the gaming trends in UK punters and gamers, estimating based on GGR, GGY and bonus rates, that the UK onshore market would be severely compromised. The formula derives a black market worth around 0.6 billion of the UK’s overall GGY, which comes out to about 6%. In the 2030 projections, that comes out to about £1.14 billion GGY, which is 13% of the online market and over double the figures of today. Of course, these are just using bonus rates and GGY/GGR figures. They cannot predict the individual behaviours of players. But it is thought that there will be an adverse reaction in the long run, with changes such as the following:

• Reduced promotions and bonuses are expected to lead to less player activity
• Slimmer margins on sports betting, particularly for in-play and high-liability markets, could make certain products unprofitable
• A migration to offshore platforms, with untaxed odds, aggressive bonuses, and no affordability checks
• Operator consolidation and market exits may shrink the taxable base altogether

How Operators Are Reacting

This was one of the biggest events for UK gambling operators in recent years, and many brands had already braced for the worst in the months preceding Rachel Reeves’ UK Budget. Many smaller online casino brands cut back on staff, restructured their bonus offers, and limited their marketing campaigns to cull spending. Larger brands, like Bet3865, Entain and Flutter looked at relocation options, such as Flutter moving SkyBet to Malta. The idea would be to expand the internationally licensed offerings, taking as much of the workforce abroad as possible, but while retaining the UKGC licence and permissions.

Thus, these brands could save on operational costs and taxation (not the gambling duty but staff, rental, and overheads). Among the best options for brands targeting the UK, that could involve taking the base of operations to:

• Antigua and Barbuda
• Alderney
• Gibraltar
• Isle of Man
• Malta
• Curacao

The smaller operators, who own around 1/3 of the UK iGaming market according to H2GC, wouldn’t have the financial means or resources to move abroad and set up their operations outside the UK.

Cutting Back on Costly Games

This is another way to cut the spending – by online casinos choosing cheaper games. Yep, not all games have the same operational costs, and there are categories that are far pricier than others. This is due to a number of factors including higher supplier fees, studio costs, or higher liability exposure than the standard RNG casino games.

Premium games mostly include live dealer titles and gameshows (the most expensive category) from major providers like Pragmatic Play Live, Playtech, or Evolution. High cost games include:

• Progressive jackpots: These eat into operator margins due to pooled staking contributions for the jackpot prizes
• High limit table games: Increased risk exposure, higher liability needed per round to accommodate high stakes gaming
• High volatility slots: High volatility in slots means greater liability exposure
• Branded slots: Themed slots are generally ok, but branded games may have additional fees to pay for intellectual property rights
• Live dealer games: Studio rentals, dealer costs, real time streaming infrastructure all increase the cost of running these games
• Live gameshows: The most expensive because of IP rights fees, custom built studios, bespoke RNG devices used, and the need for professional live hosts. They are also highly expensive to create

No operators have publicly announced that they will cut back on their games collection, and doing so would be a hugely unpopular decision among their consumer base. Perhaps even more so than diminishing promotional offers, which is expected all across the board.

Change in the UK iGaming Experience for Players

A significant consolidation is required on behalf of the operators, and most likely the UK players and bettors. Smaller operators are the most likely to exit, whereas large brands may retain their games and sports betting products, but reduce the value of promotional offers. According to the H2GC data, they own 2/3 of the UK market and provide 12% bonus rates, whereas smaller operators (1/3 of market) provide around 25% bonus rates.

The bingo, UK landbased casinos, and horse race betting industry in the UK are not going to be affected by the laws. Sports betting will be impacted, to a certain degree, but the brunt of the tax hikes have been aimed at the online casino industry in the UK. Changes are sure to come, even if the tax duty is set to rise on April Fool’s Day of next year (not for sarcastic purposes; the UK fiscal tax year ends in the first week of April). So there is plenty of time between now and then for operators to restructure, and the first amendments will probably roll out in the beginning of this year. But the big question is whether the taxation will impact the rising onshore UK gambling scene, or whether it can send it back a few years and send traffic to the UK’s black market.