Reeves Unveils Biggest Shake-Up to Gambling Taxes in a Decade as Online Operators Brace for Impact

_{Chancellor Rachel Reeves delivered her first Budget after the details were leaked early. (Image: Fred Duval/Alamy)}

Chancellor Rachel Reeves has delivered her first full Budget, confirming a major reworking of the UK’s tax system only hours after the document was accidentally released ahead of schedule. The package freezes income-tax thresholds, adds new charges on high-value homes, introduces levies for electric-vehicle drivers, and ends the two-child cap on means-tested benefits.

But the most dramatic shift lands on gambling, where Reeves announced the sharpest rise to online duties in more than 10 years. The government says the changes are necessary to stabilise public finances. Opponents warn the UK is heading toward its highest tax burden in modern history, with Treasury projections showing revenues reaching 38% of GDP by 2030–31.

Online Gambling Feels the Full Force of the Budget

Reeves confirmed that Remote Gaming Duty will rise from 21% to 40%, with the increase taking effect in April 2026. Duty on remote sports betting will increase from 15% to 25% from April 2027, creating a financial gulf between online and retail operators.

Land-based betting shops, land based casino destinations in the UK, and the horseracing sector are untouched. Bingo Duty will be abolished entirely from April 2026.

For many in the retail sector, the decision marks a clear recognition that in-person gambling faces different pressures than online play. Veteran bingo operator Peter Woolley said the reform appears positive at first glance.

“As is always the case I’m sure the devil will be in the details,” he said, adding that his industry has long argued for separate treatment between online and retail. 

“We’ve lobbied for a long time that retail bingo is different to online, and now it seems that’s finally been recognised.”

Treasury officials say the gambling changes will raise more than £1 billion a year by 2031, making gambling one of the Budget’s most significant revenue generators. The reforms follow a decade of political scrutiny over online gambling harms and years of debate over whether remote operators contribute enough tax relative to their size.

Who Was Spared and Why

Horse racing, betting shops, and land-based casinos avoided any tax rise. Racing in particular had braced for an increase following speculation that the government might widen its revenue net. Instead, the duty on racing bets remains at 15% for both online and retail wagers.

The government has not yet detailed why it chose to shield racing, though officials have previously highlighted its rural economic footprint and reliance on betting-related funding. Machine Betting Duty, which covers fixed-odds betting terminals in shops, also remains unchanged.

Analysts say these decisions reflect two broader political realities: racing’s cultural standing and the government’s desire to target fast-growing online segments without undermining already-weakened high-street gambling.

Betting and Gaming Council CEO, Grainne Hurst, said: 

“Massive tax increases for online betting and gaming announced in the Budget make them among the highest in the world, and are a devastating hammer blow to tens of thousands of people working in the industry across the UK, and millions of customers who enjoy a bet."

“Regulated betting and gaming is one of the UK’s few globally successful sectors, generating £6.8bn for the economy, contributing over £4bn in tax and supporting 109,000 jobs, while delivering vital funding for British sport.

“While we welcome the decision not to raise land-based duties and to scrap bingo duty - these excessive online tax increases will undermine jobs, investment and growth across the UK."

“The Government’s Budget is a massive win for the incredibly harmful, unsafe, unregulated gambling black market, which pays no tax and offers none of the protections that exist in the regulated sector, said Hurst"

Hurst concluded by saying: “These decisions are bad for jobs, bad for customers, bad for sports - and bad for safer gambling”.

Sector Fallout: A Two-Tier Gambling System Emerges

The announcement sparked immediate volatility among listed gambling operators, with share prices slipping as investors assessed the scale of the changes. Analysts warn the increases will squeeze margins, push companies to rethink product design, and diminish the generous bonuses and promotions common in online markets.

Advocates for gambling-harm reduction welcomed the direction of travel, arguing that tax policy can support investment in treatment and prevention. One campaigner said the additional revenue “leads to meaningful investment in prevention, early intervention, and community-led treatment,” noting that local authorities often lack long-term funding for support services.

Industry groups, however, fear the steep rise will make licensed operators less competitive and risk pushing high-intensity players to offshore, unlicensed sites that pay no UK tax and avoid consumer-protection rules.

The government is also reviewing whether existing remote gambling taxes should be folded into a single structure, creating a unified Remote Betting and Gaming Duty. No timeline has been given.

Tax Measures Reach Beyond Gambling

While online operators face the heaviest immediate impact, much of the Budget centres on household measures. Income-tax thresholds will remain frozen until April 2031, a move that fiscal experts say will quietly push millions into higher tax brackets as wages grow. New property taxes will apply to homes valued above £2 million and £5 million, while electric-vehicle owners will face a new mileage charge.

The government also confirmed it will remove the two-child limit on means-tested benefits, a significant welfare shift that ministers say will reduce child poverty.

Political Reaction and the Road Ahead

Opposition parties moved quickly to challenge the Budget. Conservative leader Kemi Badenoch called the package a “total humiliation” and said the government was “hiking taxes to pay for welfare.” Liberal Democrat leader Ed Davey argued that “you can’t tax your way to growth” and warned that extending tax freezes and raising duties could stall the recovery.

Growth forecasts have been downgraded, though Treasury officials maintain that the reforms prioritise long-term stability.

The chancellor’s first Budget spares racing and high-street shops but hits remote betting and online casinos with steep duty increases, opening a clear divide between retail and digital operators.

For gambling, the message is clear: retail was spared, online was speared, and operators now face two years of staged increases that could reshape the industry. How the new revenue is allocated, whether to treatment, regulation, or general spending, remains undecided.

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