The Budget announced on Wednesday by Chancellor Rachel Reeves takes the United Kingdom’s tax-to-GDP ratio above 38 per cent, the highest level in more than 60 years.
The Chancellor has raised taxes by more than £26 billion in an effort to balance the books, but some argue that this will cause more damage to an already beleaguered economy.
The Office for Budget Responsibility estimates that the package of gambling tax changes could raise £1.1 billion by 2029/30, but similar tax hikes in other European countries have resulted in less tax revenue, as companies abandon planned investments and players jump ship to unlicensed gambling operators.
“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 Grainne Hurst, CEO of the Betting and Gaming Council. “These decisions are bad for jobs, bad for customers, bad for sports – and bad for safer gambling.”
Industry response
Evoke plc., operator of brands such as William Hill, 888 and Mr Green, was hardest hit by the announcement and saw its share price fall by more than 18 per cent on Wednesday.
The company issued a statement highlighting the fact that it paid taxes and duties of £329m to the UK Exchequer in 2024, equating to more than 60 per cent of its UK profits.
“It is the Board’s assessment that RGD [Remote Gaming Duty] at 40 per cent will result in substantial and far-reaching changes to the entire UK operating environment for betting and gaming, including driving further growth in the unregulated and untaxed black-market,” said the company.
“As a result, the Board believes that the significant changes in RGD announced today will ultimately reduce the amount of tax generated by the UK gambling industry. In addition, the significant increases in duties reduce the commercial rationale for licensed operators such as evoke to invest in the UK market and, consequently, the Board believes that several thousand UK jobs in the betting and gaming industry will be lost as a direct result.”
The company also warned of the impact of higher taxes on responsible gambling.
“Crucially, the Board believes the duty increases will severely jeopardise the progress made by the licensed UK betting and gaming industry during recent years regarding safer gambling. As a direct result of today’s changes, the Board expects that – as has been seen in other markets that have experienced significant tax increases – regulated betting and gaming products will need to become more expensive for consumers, which will in turn drive more players to the black-market where there is no protection for customers, no accountability for operators, and no tax generation.”
The company estimates that the tax increase will cost it approximately £125-135 million on an annualised basis once fully implemented from April 2027, with approximately £80 million of the pre-mitigation impact arising in FY26.
Evoke chief executive Per Widerström said: “We will begin immediately on executing our mitigation plans, which involve a significant reduction in investment into the UK, and, very regrettably, the likely need for thousands of jobs to be cut up and down the country.”
The company has withdrawn its medium-term financial targets as it evaluates its future investment plans but noted that it may benefit from further consolidation of market share with the likely exit of smaller operators due to the rising costs.
Shares in evoke plc. (LSE:EVOK) closed 18.32 per cent lower at 30.55 pence per share on Wednesday.
Entain plc., operator of brands including Ladbrokes and Coral, said that maintaining well-balanced regulatory frameworks alongside proportionate tax regimes are critical to protecting customers and supporting the sector.
“Today’s announced tax changes fail to deliver this balance and will see regulated operators limited to providing a less attractive and lower quality customer offering compared to the unlicensed and untaxed black market,” said the company. “These disproportionate tax increases will have a detrimental impact on the economic contribution of the gambling industry, put jobs at risk, reduce funding for sports, and benefit the black market.”
The tax increases are expected to cost Entain approximately £200 million on an annualised basis, before any mitigations.
Entain hopes to capture market share as others are forced to exit the UK market. In the meantime, the company will reduce marketing and promotions expenditure in an attempt to mitigate 25 per cent of the impact of the higher costs.
“We are deeply disappointed by today’s decision to punitively increase UK gambling taxes, putting at risk an industry which already contributes £7 billion annually to the UK economy and supports over 100,000 jobs across the country,” said Entain CEO Stella David.
“Disproportionately increasing gambling taxes will not only have a detrimental impact on our industry but also heightens the risk for customers. As seen in other countries, punitive tax increases often lead to lower tax revenues overall, whilst also driving players to illegal, unregulated operators with no player protections. The Government must now urgently tackle the black market and the consequences of today’s decision.”
Shares in Entain plc. (LSE:ENT) closed 4.97 per cent higher at 784.10 pence per share.
Rank Group plc., operator of brands including Grosvenor Casinos and Mecca Bingo, said the Budget would reduce its operating profit by approximately £40 million before mitigation.
Rank will benefit from the abolition of bingo duty to the tune of £6 million annually, but this will be offset by additional remote duty costs of approximately £46 million.
“The announced increase in Remote Gaming Duty in the UK Budget represents a very significant blow to the regulated betting and gaming industry in the UK,” said Rank Group chief executive John O’Reilly. “Whilst we are pleased that the Government has abolished bingo duty which will help to sustain jobs and investment in the land-based sector, the far more significant impact on the Group is the hit to digital profitability.
“In the year to 30 June 2025, Rank reported a profit after tax of £44.6 million and paid taxes in the UK of £188 million. That burden will now increase by a further £40 million and we will look to mitigate the impact where possible.”
As a result of the Budget, Rank is reviewing its investment plans for the UK Digital business.
Shares in Rank Group plc. (LSE:RNK) closed 11.94 per cent higher at 120.00 pence per share.
Flutter Entertainment plc., whose UK brands include Sky Bet, Sky Gaming, Paddy Power, Betfair and Tombola, said the changes in the Budget will cost it approximately US$320 million in 2026 and $540 million in 2027, prior to any mitigation.
The company said that for both Online Sports betting and iGaming tax increases, direct first order mitigation, including reduced operational, promotional and marketing spend is expected to be approximately 20 per cent of the gross impact in the first six months post implementation, rising to approximately 40 per cent thereafter.
Kevin Harrington, chief executive of Flutter UK & Ireland, commented: “Today’s tax increases are a very disappointing outcome and will have a significant adverse impact on our industry. The Chancellor rightly wants to address harm, but these changes will hand a big win to illegal, unlicensed gambling operators who will become more competitive overnight.
“These black market operators don’t pay tax and don’t invest in safer gambling. At 40 percent, the UK’s remote gaming duty is now above countries such as the Netherlands, where a recent tax increase saw a rise in illegal gambling and a fall in Government receipts. Despite this impact, I am confident that through both our scale and leading position in the UK, as well as the proactive cost initiatives that we are taking, we are well placed to navigate through today’s changes.”
As with evoke and Entain, Flutter Entertainment also expects to benefit from market consolidation in the UK.
Shares in Flutter Entertainment plc. (LSE:FLTR) closed 2.51 per cent higher at 15,125.00 pence per share.
Playtech plc. said that the new rates will have an estimated impact on 2026 Group Adjusted EBITDA in the high-teens millions of euros before mitigation.
“However, given the Group’s geographic diversity across regulated markets and strong performance and prospects outside of the UK, Playtech remains comfortable that it can meet market expectations for the full year 2026,” said the company.
Shares in Playtech plc. (LSE:PTEC) closed 0.27 per cent higher at 243.15 pence per share.
Super Group, operator of the Betway and Spin brands, expects the tax increases to have a negative impact of 6 per cent on 2026 Group Adjusted EBITDA and said that it already has several mitigation levers in motion to offset the tax impact.
“Super Group supports the reasonable taxation of online gaming in the UK,” said chief executive Neal Menashe. “We rely on the government to ensure that today’s very substantial increase should be paired with robust and strict enforcement against non-paying offshore operators. This is essential to protect the regulated sector’s investment in jobs, technology, and responsible gaming in the UK.”
Shares in Super Group (NYSE:SGHC) closed 6.74 per cent lower at $10.93 per share.
British Horseracing, which was spared from the tax hikes, welcomed the Government’s decision to give it preferential treatment over other forms of betting.
“Today’s welcome outcome demonstrates that the Chancellor has listened to our concerns and rightly recognised that racing is a unique national asset – culturally, socially and economically – and we welcome this support,” said British Horseracing Association acting chief executive Brant Dunshea.
“Betting on racing is an integral part of the enjoyment of our sport, and maintaining the rate of horserace betting duties is an important step by the Government to help preserve revenue streams and protect the 85,000 jobs supported by the racing across the country.
“Racing has been part of the British way of life for hundreds of years. It binds our communities together in shared experience, it brings joy to millions. It puts the country on the world stage. It is right that the Government has understood this and acted accordingly,” added Dunshea. “At the same time, we recognise that the increase in general taxation on the betting industry may have trickle-down effects on racing. We will work with our partners in the betting industry to understand the implications of this, and how we can work together to ensure that British horseracing continues to thrive.”
Bacta, Britain’s Amusement and Gaming Association, will also be celebrating a win after being spared an increase in Machine Gaming Duty (MGD).
The industry association has not issued a formal response to the Budget but had campaigned vigorously to prevent a rise in MGD, which could have led to the closure of hundreds of amusement and gaming centres across the UK. But the sector was not completely spared, as a hike in the minimum wage will further erode its slim margins after years of rising costs.