Betting and Gaming Council warns tax rises may boost black market

The Betting and Gaming Council (BGC) chief executive Grainne Hurst has publicly welcomed a recent debate in the United Kingdom Parliament regarding the government’s plan to increase taxes on online gambling and betting activities. Members of Parliament from multiple parties expressed serious concerns about how these proposed tax changes could affect employment, consumer behaviour and the long-term sustainability of the regulated gambling sector.

These discussions come after the UK Government’s Autumn Budget 2025 announcement of significant adjustments to gambling duty rates. The changes include raising the rate of Remote Gaming Duty from 21 per cent to 40 per cent starting April 2026 and increasing the rate applied to online sports betting from 15 per cent to 25 per cent from April 2027. At the same time, Bingo Duty is set to be abolished from April 2026 while betting shop and horseracing tax rates remain unchanged. These measures are intended to modernise the taxation framework and generate additional revenue for public finances.

Background to the tax changes

The UK Government’s Budget 2025 set out major adjustments to the gambling tax framework. Remote Gaming Duty, which applies to online casino-type activities, will nearly double from 21 per cent to 40 per cent from April 2026. This increase covers remote gaming products such as online slots and casino games. Simultaneously, the government introduced a new Remote Betting Rate of 25 per cent for online sports bets, taking effect from April 2027. Retail betting shops and horseracing rates remain at 15 per cent. The abolition of Bingo Duty at 10 per cent has been presented as a simplification measure for the sector.

Chancellor Rachel Reeves described this tax adjustment as part of the government’s strategy to ensure operators contribute fairly while reflecting evolving patterns in gambling consumption. Officials indicated that the focus is on activities that have expanded rapidly and are considered higher risk for certain players. Critics, however, have questioned the assumption that remote gaming and online betting are uniformly more harmful.

Parliamentary debate and industry reaction

During a recent debate on the Finance Bill in the House of Commons, several MPs voiced concerns about the potential consequences of these tax increases. Some highlighted the risk that excessive taxation could alter consumer behaviour, reduce demand for regulated products and push gamblers toward unregulated platforms operating outside the UK.

James Wild, shadow exchequer secretary to the Treasury, emphasised that “when taxes rise too far, behaviour can change and the yield can go down.” He noted that rather than reducing demand, activity might shift to unregulated markets where consumer protections are weaker, fraud risks are higher and tax revenue is not collected.

These observations resonated with industry leaders, who have repeatedly warned that higher duty rates might damage the commercial viability of regulated operators and reduce the sector’s contribution to the UK economy.

BGC’s position on the tax increases

Grainne Hurst reiterated these warnings in response to the parliamentary debate. She described the potential impact on the regulated sector and stressed that policy decisions should be guided by evidence rather than perception.

Hurst stated that MPs were “right to highlight the real-world consequences of further gambling tax rises which will result in job losses, shop closures and will drive customers towards the unsafe and harmful black market.” She highlighted that the regulated betting and gaming industry currently supports an estimated 109,000 jobs in the UK and contributes around £4 billion annually in tax revenues. Additionally, the sector provides substantial funding to sports organisations and charities through sponsorships and community initiatives.

She added that imposing additional tax burdens on top of existing regulatory costs undermines the economic sustainability of the regulated market and effectively benefits illegal operators who do not pay taxes or adhere to UK regulations. Hurst called on the government to adopt an evidence-led approach that supports jobs and economic growth, maintains funding for charitable causes and avoids inadvertently rewarding the illegal black market.

Broader industry concerns

Industry reaction has extended beyond the BGC. Major gambling companies and stakeholders have expressed alarm at the scale of the tax increases, describing them as disproportionate and likely to harm investment, innovation and employment in the UK gambling sector.

Some executives fear that higher cost burdens will reduce profitability, leading operators to cut jobs or scale back operations in the UK. Companies have indicated they may need to adjust marketing budgets and operational strategies to maintain financial sustainability.

In regions such as Gibraltar, which hosts a number of online gambling operators, officials have warned that steep UK tax increases could reduce local revenues, affect employment and weaken a key economic sector.

At the parliamentary level, MPs representing constituencies with high employment in the gambling sector have warned that increased tax liabilities could lead to redundancies and business closures if operators cannot absorb the additional costs.

Government rationale and public finances

From the government’s perspective, these tax adjustments are intended to modernise the system, raise revenue for public services and address perceived harm associated with certain types of online gambling. Officials argue that this approach balances a fair tax framework with measures to protect consumers, while generating stable funds for public priorities.

Proponents within Parliament argue that the tax increases provide a stable source of revenue without immediately affecting high street betting shops or horseracing, which retain existing rates. The abolition of Bingo Duty is framed as a simplification step benefiting a lower-risk sector.

Possible industry responses and future outlook

Operators are likely to continue assessing the tax impact on their business models throughout 2026 and 2027. Some may adjust pricing, promotions or operations to mitigate financial strain. Others could consider expanding into international markets to offset UK tax pressures. There may also be increased consolidation in the sector if smaller firms find it difficult to absorb the new tax burden.

The government has pledged funding for enforcement against illegal gambling operators, which could protect consumers and reduce the appeal of unregulated markets. However, industry stakeholders stress the importance of monitoring actual market responses and consumer behaviour after the tax changes take effect.

The ongoing dialogue between policymakers, industry representatives and consumer groups is expected to continue. Many emphasise the need for an evidence-led approach to taxation that balances revenue objectives with industry sustainability, job protection and consumer safety.

Conclusion

The proposed increases in UK gambling taxes represent a significant shift in fiscal policy that could have wide-ranging consequences for the regulated gambling industry, employment, consumer behaviour and public funding. While the government emphasises the need to modernise the tax framework and address perceived risks associated with online gambling, industry leaders and MPs have highlighted the potential unintended effects, including job losses, shop closures and the growth of an unregulated black market.

Grainne Hurst and the Betting and Gaming Council have stressed the importance of an evidence-led approach, one that balances public revenue objectives with the sustainability of the regulated sector, the protection of consumers and continued support for charitable and sporting organisations. As the Finance Bill progresses, ongoing dialogue between policymakers, industry stakeholders and consumer groups will be crucial to ensure that the policy achieves its intended goals without undermining the regulated market or exposing players to greater risk.

Ultimately, the debate underscores the complex challenge of regulating and taxing a rapidly evolving online gambling landscape while safeguarding jobs, economic contributions and consumer protection.

FAQs

What is Remote Gaming Duty and when does the rate change?
Remote Gaming Duty is a tax on online gaming profits and will rise from 21 per cent to 40 per cent from 1 April 2026.

When will the new remote betting rates apply?
The new remote betting rate of 25 per cent within General Betting Duty will apply from 1 April 2027.

Will horseracing bets be subject to the new higher tax rate?
No, remote bets on UK horseracing will remain at 15 per cent as existing levies already apply.

What happened to Bingo Duty?
Bingo Duty will be abolished from 1 April 2026, removing this tax from land-based bingo businesses.

Why are MPs concerned about the tax increases?
Some MPs worry higher taxes may push players toward illegal operators that are unregulated and untaxed.

How many jobs does the regulated gambling industry support?
Industry estimates suggest the regulated sector supports around 109,000 jobs across the UK.

Can higher tax rates influence consumer protection?
Industry representatives warn that pushing players to unregulated markets may reduce protections that exist in regulated environments.

Are betting shops affected by the new tax changes?
High street betting shops retain existing tax rates and are not directly affected by the new remote gaming or betting taxes.

What is the government’s rationale for the tax changes?
The government states the changes modernise the tax system, raise revenue and target higher-risk online gambling activities.

How might operators respond to these tax increases?
Operators may reduce marketing budgets, increase operational efficiency or adjust business strategies to cope with the higher taxes.