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Gambling has a long and varied history in the United Kingdom. Having started as a social activity among friends at the pub, gambling in the UK is now legalised and regulated by the Gambling Commission. Between April and July 2025, statistics show 47% of people participated in some form of gambling in the UK. In addition, between April 2024 and March 2025, the gambling industry in the UK was valued at £16.8 billion.

So, why is the government raising gambling tax in the UK and what does it mean for the regulated market?

The UK Gambling Tax Hike

Before we look more closely at the impact of the gambling tax rise in the UK, it is important to understand exactly how it works. The Remote Gaming Duty (RGD) will increase from 21% to 40% from April 2026. That includes all forms of casino games, such as slots and table games. It also includes any gaming content that is not sports related, such as crash games, which have grown in popularity over recent years.

There will also be an increase in Online Betting Duty and that will come into force in 2027. The tax will increase from 15% to 25%. There are exceptions to this duty, including remote horseracing bets, spread betting, and pool betting. The question is, how are the tax hikes going to impact the regulated gambling market in the UK and could it backfire?

The Reasons for Increasing UK Gambling Tax

The government predicts the changes to UK gambling tax will raise an additional £1.1billion per year by the end of the decade. This is seen as a major contribution to the public finances which, as the government has keenly pointed out, needed a boost for some time. The restructuring of UK gambling tax is to provide a balance between land-based and digital gambling and as a response to the increasing profit enjoyed by gambling companies in the United Kingdom. The government clearly believes the gambling sector can absorb a tax increase but what are the risks involved when hiking gambling tax?

Risks of UK Gambling Tax Hike

The first consideration must be the impact on the individual gambler. Anyone who is gambling at a regulated online casino or bookmaker in the UK is likely to see some changes as companies look at ways to absorb higher costs. The cost of energy and employee wages are two issues gambling companies have been dealing with over the last two years and a tax hike will leave gambling companies with little room for manoeuvre. As BritishGambler, UK gambling experts, pointed out, that could lead to poorer odds and promotions for gamblers as companies try to balance the books. In turn, that could see gamblers look at alternative options, especially online, where they could start using unregulated operators offering superior odds and promotions.

'That leaves the UK with two big problems. The first being the number of people who are using offshore gambling operators, which begin to thrive, and the second being the loss of income for regulated UK gambling operators and igaming affiliates', says Alexander Kostin of BritishGambler.co.uk.

Any UK based gambling company that begins to struggle as a result of the increase in taxation may decide to move their business abroad. That could lead to a complete loss in taxation for the UK government as that company, which was paying tax in the UK, is now paying tax to a different country but at a lower rate. It also reduces the number of gambling options for punters.

If the gambling market in the country begins to shrink, the amount of money made in tax by the government will shrink. There could be a scenario where the government makes less money having raised taxes than they were originally.

Future investment in the UK could also be hit, especially in the regulated gambling sector. The lack of incentive for new and innovative gambling companies to enter the regulated UK market means they could choose to take their investment elsewhere.

In conclusion, there can be no doubt that hiking gambling taxes in the UK comes with huge risks. That applies to the government, betting and igaming companies and the individual gambler.