TLDR
- Remote Gaming Duty (RGD) rises from 21% to 40% in April 2026, nearly doubling overnight
- Online Betting Duty increases from 15% to 25% in 2027
- Government expects to raise an extra £1.1bn per year by end of the decade
- Operators warn of reduced odds, fewer bonuses, and squeezed margins
- Industry fears players will shift to unregulated offshore platforms, undermining tax revenue
The UK government is set to nearly double the Remote Gaming Duty from 21% to 40% starting April 2026. The tax applies to online casino products including slots, table games, and crash games.
A second increase will follow in 2027, when Online Betting Duty rises from 15% to 25%. Remote horse racing, spread betting, and pool betting are excluded from both rises.
The UK gambling industry was valued at £16.8 billion between April 2024 and March 2025. During that same period, 47% of UK adults participated in some form of gambling.
The government says the changes will generate an additional £1.1bn per year by the end of the decade. Officials argue the sector can absorb higher taxes given continued digital growth.
The restructuring also aims to close the gap between land-based and online gambling taxation. Physical betting shops currently pay General Betting Duty at 15%, while online operators now face 40% on casino products.
That gap is creating an unusual incentive. Operators taxed at 40% on digital slots but only 15% on physical machines may shift marketing spend toward high street shops.
However, physical shops face their own pressures. Rising staff costs and rent, particularly in cities like London, mean the bricks-and-mortar recovery is far from guaranteed.
Margin Squeeze on Operators
For online operators, the near-doubling of RGD directly compresses profit margins. Companies already dealing with rising energy costs, wages, and compliance requirements have little room left.
Industry experts warn this could lead to worse odds and fewer promotions for players. Operators may also cut bonus offers and reduce product development budgets.
Alexander Kostin of BritishGambler.co.uk says the tax rise leaves the UK with two problems: growth in offshore gambling platforms and lost income for regulated UK operators.
The Offshore Risk
The central concern raised by analysts is channelisation — the share of gambling activity that stays within the regulated UK market. If regulated platforms become less competitive, players may move to offshore sites.
Offshore operators typically offer higher returns, fewer restrictions, and more aggressive promotions. They sit outside UK regulatory oversight and pay no UK tax.
If that shift happens at scale, the government could end up collecting less tax than before the hike, not more. Higher rates do not guarantee higher revenue if activity moves beyond the regulated market.
New and smaller operators may also reconsider entering the UK market. Reduced profitability makes the UK less attractive for investment compared to lower-tax jurisdictions.
The UK gambling industry generated £16.8bn in the year to March 2025. That figure, and the tax it produces, depends on the regulated market staying competitive enough to retain players.
The new RGD rate of 40% takes effect in April 2026, with the Online Betting Duty increase following in 2027.
