Leaked 40% Gambling Levy Sends Shockwaves Through UK Betting Industry
A leaked Office for Budget Responsibility briefing revealed plans for a 40% remote gaming duty.
LISTEN TO THIS ARTICLE:Documents from the Office for Budget Responsibility (OBR), released ahead of the UK budget, show the government is preparing to raise the remote gaming duty from 21% to 40% from April 2026 – a move that has immediate market and strategic implications for operators, investors and regulators.
The leaked figures also confirm the abolition of the current 10% bingo duty and outline a further change in 2027, introducing a new general betting duty of 25% that will exclude spread betting, pool betting and horse racing. The Treasury’s modelling, as summarised by the OBR, targets roughly GBP 1.1 billion in annual receipts from the reworked gambling tax regime by 2029-2030, but notes that some expected revenue will be lost as players shift to offshore sites or reduce activity.
Market Reaction and Treasury Projections
Markets reacted immediately to the leak. Shares in major listed operators, including Entain and Flutter, fell sharply on the day of the disclosure, with some firms suffering double-digit declines as investors priced in the prospect of squeezed margins and slower growth. Smaller, publicly traded operators and suppliers saw even greater volatility.
The OBR briefing anticipates that consumer behaviour will change in response to higher taxation, deducting roughly a third from potential receipts to reflect migration to offshore platforms and reduced play. That admission has tempered the Treasury's headline target and fed industry concern that the real economic impact could be broader than the headline tax take suggests.
A spokesperson for the Betting and Gaming Council responded to the proposals by warning of negative consequences for jobs and player protections. "This proposal would risk jobs across the UK gambling sector, push players to unregulated offshore sites and undermine years of work to protect consumers. A 40% remote gaming duty is simply unsustainable for many operators and will force companies to cut staff, reduce marketing that funds safer gambling initiatives, or leave the market entirely", the spokesperson said.
Industry participants highlighted the uneven effect across verticals. Operators with high customer acquisition costs and thin margins on online slots and casino verticals are most exposed; sports-focused businesses with stronger recurring revenue profiles may be better positioned to absorb the rise, although the planned 25% general betting duty in 2027 will add pressure across a broader segment of the market.
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How Operators May Respond
Executives say the options available are unappealing: reduce marketing and product investment, raise prices for customers, relocate parts of the business offshore, or pursue consolidation. "For operators running thin-margin slots businesses, this move isn't just painful, it's existential. We are already planning workforce reductions, pausing product launches and reviewing our UK footprint. Some firms will have no option but to relocate", said a senior executive at a major online operator who asked not to be named.
Relocations and corporate restructurings are not hypothetical. In recent years, several online operators have shifted elements of their operations or corporate domicile to lower-tax jurisdictions. Analysts suggest that a sustained 40% duty would accelerate such moves and could prompt merger activity as firms seek scale to spread higher fixed costs.
An independent gaming analyst noted: "Markets reacted swiftly because the numbers change long-term earnings models. Even after accounting for expected behavioral impacts, the Treasury's target of GBP 1.1 billion by 2029 2030 implies a materially smaller UK market and pressures on margins that will force strategic change across the sector."
Regulators will face a delicate balancing act. The UK Gambling Commission and Treasury have both emphasised consumer protection and fiscal objectives in recent policy statements. Higher taxes that drive players offshore could undermine consumer safeguards that the regulator has spent years building, raising questions about enforcement and cross-border cooperation.
With the changes scheduled to take effect in stages from April 2026 and through 2027, operators, investors and trade bodies now have a narrow window to lobby, reforecast and prepare for an overhauled tax environment that could reshape the UK gambling landscape over the rest of the decade.
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