UK Gambling Market Faces Risks After Major Tax Increase

What’s Changing?

The UK government proposed major changes to gambling taxation as part of its budget, which came into force on the 1st April 2026. The largest of these changes is the increase to Remote Gaming Duty, which previously sat at 21% and is now almost double, at 40%.

The Treasury expects the changes will:

• Generate substantial additional revenue
• Simplify a somewhat complicated taxation system

However, critics such as Grainne Hurst of the BGC have argued that these higher taxes may instead reduce operator margins, leading to less competitive promotions for players, lower investment, and potentially less competitive regulated offerings, leading to a swell for the black market.

The Spiral Effect: Explained

The Spiral Effect is an unwanted, but potentially serious, outcome of the hike in gambling taxes. As taxes rise, operators face higher costs. These costs may be passed on to customers through reduced bonuses, fewer promotions, or less favourable odds.

If regulated sites become less competitive, it’s feared that some players may turn to offshore operators. These operators are not subject to UK taxes or regulatory requirements, meaning they could offer more competitive bonuses, better odds, etc.

Eventually, this would lead to lost tax revenue for the UK Treasury, rather than their predicted increase. Perhaps even more worrying are the implications for the UK gambling public, who could end up playing at sites with no legal routes for complaints and far lower safety and fairness standards.