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The UK government’s new betting and gaming tax package is facing a sharp backlash from industry leaders, who say the measures will miss their revenue targets and turbo-charge unlicensed gambling instead of curbing it.
Chancellor Rachel Reeves used her November Budget to almost double Remote Gaming Duty (RGD) on online casino-style products from 21% to 40% from April 2026, and to introduce a new 25% remote General Betting Duty on online sports bets from April 2027. The Treasury says the package should raise around £1.1bn in extra gambling tax by 2029-30.
The Betting and Gaming Council (BGC), which represents much of the regulated sector, argues that the government’s own forecaster has already punctured that claim – and has warned that harmful, illegal gambling could double in the process.
OBR flags weaker yield and consumer squeeze
In an assessment released alongside the Budget, the Office for Budget Responsibility (OBR) confirmed that higher gambling duties are expected to raise more money than today’s system. However, once it factored in how customers and operators are likely to react, the watchdog concluded that the measures will reduce the headline yield by around one third compared with a simple, no-behavioural-change estimate.
By 2029-30, the OBR projects that around £500m of potential receipts will be lost as companies pass on higher tax through worse odds or higher margins and some customers walk away. Its analysis suggests operators will push roughly 90% of the additional duty onto punters via price changes or reduced payouts, making regulated products less attractive and encouraging a shift to untaxed, unregulated sites.
These warnings sit awkwardly with the government’s public messaging, which continues to emphasise the £1.1bn headline figure and frames the package as a way to ensure online betting firms “pay their fair share” while funding welfare reforms.
BGC: jobs risk and a 140% jump in black-market stakes
The BGC has seized on the OBR numbers and on external modelling to argue that the Budget tax plans amount to a high-risk experiment with one of the UK’s most digitalised export industries.
Drawing on EY analysis, the council says the combined duty increases could put nearly 17,000 skilled jobs at risk across online betting, gaming, and associated tech and data roles. It also warns that more than £6bn in stakes could migrate to the black market, representing a 140% increase in the size of the illegal channel.
BGC chief executive Grainne Hurst said the government “cannot ignore the fact that its own figures show serious damage ahead.” She argued that pushing tax rates to the top end of international comparisons will inevitably “make the licensed offer less competitive and hand an advantage to unlicensed operators who pay nothing and offer no protection at all.”
According to the trade body, the regulated sector currently contributes about £6.8bn a year in gross value added to the UK economy, supports more than 109,000 jobs and pays roughly £4bn in tax, including direct flows into racing, sport and tourism. It says the Budget package risks shrinking that base at the very moment other jurisdictions are actively competing for investment from betting and gaming suppliers.
International lessons: when high tax drives low channelisation
The BGC’s position is bolstered by a separate report it commissioned from PwC, which examined how high duty rates and tight product rules have affected markets such as France, Sweden, and the Netherlands. That study found that a significant share of online gambling in those countries has shifted to offshore operators, while more moderate-tax regimes like Spain and Denmark have kept most play on licensed platforms.
Industry leaders point out that a 40% RGD will put the UK well above several European peers and even above some markets that have already seen channelisation problems. Analysts have highlighted the Netherlands as a recent example, where a sharp tax rise was followed by an increase in illegal play and weaker-than-expected government receipts.
Tension between fiscal goals and safer-gambling aims
Critics across the industry say the policy risks becoming internally contradictory. On one hand, the UK is tightening advertising rules, affordability checks, and product design to reduce gambling-related harm. On the other hand, it is banking on a steep rise in tax receipts from the same activities, with the OBR already warning that players’ and firms’ behaviour will blunt that outcome.
Operators have also flagged distributional effects. Because 90% of the extra duty is expected to be passed through to customers, the cost of the tax rise will ultimately fall on the most engaged bettors and casino players – the very group that safer-gambling policies are trying to protect. Some fear that higher prices and reduced odds in the regulated channel will make riskier, offshore offers more attractive to that cohort.
In the meantime, the BGC is urging HM Treasury and the Department for Digital, Culture, Media and Sport to sit down with industry, independent analysts, and the Gambling Commission to reassess the package.
Hurst has called for “a genuinely evidence-based conversation” that weighs fiscal needs against the risks of job losses and migration to unregulated sites. In EY’s modelling, she argues, a less aggressive structure – one that narrows the tax gap with other regulated markets while preserving channelisation – could deliver more sustainable revenue over the medium term.
Source: Betting and Gaming Council
