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UK lawmakers have revived a familiar worry as Parliament moves to lock in steep duty rises on online gambling: if taxes climb too high, bettors and casino players may simply drift to offshore and unlicensed platforms that sit outside UK safeguards.
The warning surfaced during Commons debate on the Finance (No. 2) Bill, where ministers set out plans to almost double Remote Gaming Duty (RGD) on online casino-style products from 21% to 40% from 1 April 2026, alongside a new higher duty for remote betting from 1 April 2027.
Finance Bill sets out higher duties for online casino and sports betting
Under the bill’s core gambling clauses, RGD would apply to remote gaming, such as online slots and roulette. A separate change creates a new remote rate for General Betting Duty on online bets, set at 25%, while keeping the existing 15% rate for bets placed in-person in betting shops. Ministers also said remote bets on UK horse racing would stay at 15% because operators already pay the statutory horse racing betting levy, and bingo duty would be abolished from April 2026.
The government’s case is that remote products have expanded rapidly and carry a higher risk of harm than many land-based or lower-intensity formats. In the Commons, Treasury minister Lucy Rigby pointed to Gambling Commission figures showing gross gambling yield for remote gaming rising from £2.5bn in 2015–16 to £5.2bn in 2024–25, and said the higher rate is meant to reduce incentives for operators to steer customers toward higher-harm products.
“When taxes rise too far…” black market fears take centre stage
Opponents and sceptics did not argue that online gambling is low-risk. Their pushback was about outcomes: if the licensed market becomes less attractive, consumers can switch quickly, and the UK loses both tax revenue and player protections.
Shadow Treasury minister James Wild put the point bluntly in the debate, saying: “When taxes rise too far, behaviour can change and the yield can go down… activity will move to unregulated markets where consumer protections are weaker, fraud risks are higher, and tax revenue is not collected.” He also cited an Office for Budget Responsibility warning about “around £500 million” of leakage as activity shifts away from regulated markets.
Conservative MP Caroline Dinenage made a similar argument from a different angle, describing the jump to 40% as high by international standards and saying it risks pushing customers into the black market.
Labour’s Gareth Snell, whose Stoke-on-Trent constituency includes major betting-sector employment, pressed ministers on the same pressure point. He highlighted the OBR’s expectation that higher duties could drive spend toward unlicensed operators and asked what the government would do to stop the black market benefiting.
Government response: illegal market is “relatively small,” more funding for enforcement
Ministers leaned on two lines of defence.
First, Rigby said the illegal online betting market is “relatively small,” describing estimates ranging from 2% to 9% of legal online market stakes. Second, she said the government will provide an additional £26m over three years to support Gambling Commission enforcement work against illegal operators.
A separate anxiety: harm-prevention funding and the levy transition
The debate also touched on how money moves through the wider “gambling harms” system.
Dinenage, who chairs the Culture, Media and Sport Committee, warned she had received “very concerning reports” that voluntary organisations working on gambling harm prevention face a “funding cliff edge,” citing delays and uncertainty around the transition to statutory levy payments.
Ministers, and some supporting MPs, framed the duty rises as part of a broader package that shifts more of the cost burden onto higher-harm remote products while protecting lower-risk community formats like bingo halls.
The Finance (No. 2) Bill is still moving through Parliament, but the direction is clear
Higher duties on online casino products first, then a higher remote betting rate in 2027, with an explicit policy aim of squeezing harm-heavy segments while funding public services and enforcement.
The immediate question might be how the market absorbs a 40% remote gaming duty rate without accelerating migration to unlicensed sites, especially for price-sensitive customers.
Source: Hansard
