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UK Gambling industry reels as Reeves unveils multi-billion pound tax hike
The increases form part of the government’s broader attempt to close a widening fiscal gap after abandoning an income tax rise. Analysts say this shifted pressure onto sectors considered politically and economically viable targets, including gambling, real estate and banking. According to Kathleen Brooks, research director at XTB, the gambling industry had long been regarded as sitting squarely in the firing line once the government ruled out changes to income tax bands.
The changes include a steep rise in the remote gaming duty, which applies to online casino products. The rate is set to jump from 21 percent to 40 percent from April 2026. Online sports betting duties are also due to rise from 15 percent to 25 percent from April 2027. Meanwhile, bingo duty will be abolished. Retail betting shops and in-person gambling venues are not directly affected.
Market reaction was swift. Shares in major gambling operators fell sharply following the announcement, with some companies down nearly 20 percent at one point before recovering some losses. Investor nerves reflect both the scale of the tax increase and uncertainty over how companies will absorb or offset higher statutory costs.
Sharpest fiscal shock in a decade
Entain, the owner of Ladbrokes and Coral, has been among the hardest hit. The company warned that the new taxes could raise its annual costs by around £200 million for its UK and Ireland online division in the 2026 to 2027 period. Smaller operators face similar pressures. Evoke Plc, the parent group of William Hill and 888, has already withdrawn its medium-term financial guidance, saying the duties could cost the company an additional £125 million to £135 million per year when fully implemented.
Some operators have signalled they may adjust consumer pricing and reduce customer incentives to protect their margins. Reports that online betting and casino firms were preparing to pass part of the tax burden onto customers briefly lifted stocks earlier in the week. Brooks said that this reaction suggested investors believe the market may have overestimated the severity of the impact should firms successfully offset a portion of the additional costs.
Any attempt to recoup taxes through customer-facing changes carries its own risks. Analysts say the most immediate effects are likely to be seen in online verticals such as casino games, where margins are tightly managed and operators may adjust payout structures, scale back promotions or impose higher wagering requirements. For customers, this could mean reduced bonuses and less favourable gaming value.
The Treasury’s planned revenue gain would mark one of the most significant single-year cost increases imposed on the gambling sector in more than a decade. The measures follow regulatory tightening including affordability checks, new online slot stake limits and a statutory levy aimed at combating gambling harm.
Treasury seeks £30 billion boost
Industry executives have warned that higher taxes may drive players towards unlicensed offshore operators, undermining both legal businesses and government revenues. The Office for Budget Responsibility has also acknowledged that customers may reduce gambling activity or switch to unregulated platforms, potentially softening the impact of the tax changes.
Companies with heavy UK exposure face the greatest burden, though international firms licensed in Britain will also be affected. The sector now confronts a complicated period of adjustment as operators reassess business models, pricing strategies and compliance budgets.
As the 2026 implementation deadline approaches, analysts say the key question is whether the measures will raise the projected revenue without triggering a contraction in the regulated market. For now, the only certainty is that the UK gambling industry is entering one of its most challenging fiscal periods in recent memory.
