The UK government has announced plans to combine existing gambling taxes into a single Remote Betting and Gaming Duty (RBGD). This raised widespread concerns in the betting industry. The Treasury intends to replace the current three-tier tax system with a unified structure that applies to all remote gambling operations and cites simplicity and loophole closure as primary goals.
Under current rules, operators on a list of UK online casinos are subject to a 21% Remote Gaming Duty, while betting firms pay significantly less through General Betting Duty and Pool Betting Duty, both of which are 15%. The proposed consolidation threatens to eliminate this distinction and potentially raise tax burdens on betting companies to match the higher 21% rate that casino operators already pay. Though the exact percentage of the new unified tax is unknown, the possibility of increases has alarmed industry participants.
The Betting and Gaming Council (BGC), which represents regulated gambling businesses in Britain, has strongly opposed the proposed changes. Their primary concern is horse racing, which is heavily funded by betting operators through sponsorships, media rights payments, and the Horserace Betting Levy. The BGC claims that increased tax pressure will force betting companies to reduce their financial support for the sport and jeopardise its long-term viability.
Tax reforms may also drive consumers to unregulated black market gambling sites that do not offer UK consumer protections or responsible gambling safeguards. The BGC highlights the substantial economic contribution of its members, which supports more than 100,000 jobs across the country and contributes £6.8 billion to the UK economy in addition to £4 billion in tax revenue.
Industry stakeholders are particularly concerned about the timing of these tax proposals. The changes come shortly after the government published its gambling White Paper, which included significant regulatory reforms. Simultaneous tax and regulatory changes run the risk of putting gambling companies under excessive pressure and possibly preventing them from investing in player protection measures.
Legal challenges have already been raised in response to the Treasury’s plans. The Gibraltar Betting and Gaming Association (GBGA) has expressed formal concerns about the tax consolidation and claimed that it may violate EU principles regarding freedom of establishment and service provision. The GBGA claims that the changes may result in different burdens depending on the location of operators and that some businesses may be subject to double taxation. The association has requested a judicial review of the proposed taxes, citing negative impacts on market competition and consumer protection.
Authorities are trying to find an appropriate compromise between revenue generation and tax simplification so gambling industry can still protect customers and stimulate the economy. The Treasury is under pressure from a diverse group of stakeholders who have opposing views regarding the best tax structures.
Horse racing representatives are particularly concerned about developments, as the sport receives approximately £350 million per year from the betting industry through various funding streams. Racing officials are concerned that reducing betting operator margins through higher taxes will result in lower prize money, fewer race meetings, and less investment in facilities.
During the consultation period, affected parties can provide evidence of potential impacts before final decisions are made. Whatever structure emerges, the government must strike a balance between preventing market fragmentation and ensuring that tax policies reinforce, rather than undermine, recent regulatory reforms aimed at improving gambling safety standards.
Businesses in the industry are currently waiting for clarity on the rate and implementation timeline. This can be the largest gambling tax reform in recent memory, so there is a general sense of uncertainty across the industry.