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Flutter says UK gambling tax hike will cut profits
Under the changes set out in the 2025 UK Budget, remote gaming duty, the tax applied to online casino-type games, slots and other digital gaming – will increase from 21 percent to 40 percent, effective 1 April 2026. Meanwhile, for remote sports betting (excluding horse racing), a new duty rate of 25 percent will take effect from 1 April 2027, up from the current 15 percent. At the same time, the government will abolish duty on bingo operations from April 2026.
In its public response, Flutter described the changes as “a significant adverse impact on our industry.” The company said that steep tax hikes could push customers toward unregulated, offshore operators – which do not pay tax and do not adhere to regulated safer‑gambling standards.
To mitigate the impact, Flutter plans to reduce marketing and promotional spending and optimize operational costs. The company estimates that these measures could recover roughly 20 percent of the gross impact in the first six months and up to 40 percent in subsequent periods.
Even after mitigation, the tax changes will significantly reduce profitability. Online gambling has been among the most lucrative segments of the UK betting industry, and the duty increase dramatically affects that margin.
Rewriting economics of online gambling
Analysts note that larger operators like Flutter and Entain PLC are better positioned to manage the higher tax burden through international diversification and scale, while smaller firms may struggle or reduce operations.
There is concern that higher taxes could inadvertently push customers to unregulated offshore sites, where protections for players are weaker. Flutter highlighted this risk in its announcement.
The UK government expects the new tax regime to raise over £1 billion annually once fully implemented.
The changes represent a major shift in the UK’s online gambling sector. Even after mitigation efforts, operators heavily reliant on UK markets will face lower margins. The tax increases may also accelerate consolidation in the industry, favoring larger global operators.
For Flutter, the company will need to adapt through cost reductions, operational adjustments, and potentially expanded international focus. The broader market could see smaller operators exit, while some players may migrate offshore. The new tax regime is set to reshape the UK online gambling market, altering profitability and competitive dynamics.
