A serious error by the Office for Budget Responsibility (OBR) has prematurely revealed the UK government's plan to impose a punitive tax hike on the online
A serious error by the Office for Budget Responsibility (OBR) has prematurely revealed the UK government’s plan to impose a punitive tax hike on the online gambling sector. A document published early by mistake confirms that Chancellor Rachel Reeves will announce a near-doubling of the Remote Gaming Duty (RGD) from its current 21% to 40%, effective from April 2026.
This rate is significantly higher than the 30-35% range that many analysts had priced in, sending shockwaves through the market. The OBR leak also revealed that from April 2027, a new General Betting Duty (GBD) rate of 25% will be applied to remote betting. Crucially, this GBD hike will exclude horse racing, spread betting, and pool betting, confirming that the racing industry’s robust lobbying campaign has successfully secured a carve-out.
The accidental release of the data triggered an immediate sell-off in UK gambling stocks, as investors reacted to reforms that proved far worse than expected.
In Parliament, the leak was heavily criticised by the Speaker of the House and various MPs, who slammed the “serious error” of releasing sensitive market-moving data before the Chancellor’s official speech. Chancellor Reeves described the leak as “deeply disappointing.”
The OBR’s own analysis paints a grim picture of the policy’s consequences. While the Treasury hopes to raise £1.1bn in new funding by 2029 to address the fiscal deficit, the OBR explicitly warns that “behavioural responses” will significantly reduce this yield.
The document estimates that operators will pass on approximately 90% of the duty increase to customers by raising prices or reducing payouts (RTP). This is projected to reduce consumer demand and lower the potential tax yield by £0.6bn by 2029-30.
Most damagingly, the OBR admits this forecast captures “potential substitution to the illicit market.” An industry source reacted with fury to this admission, telling the media: “This is an early Christmas present for the black market, even the Treasury admit huge amounts of tax will be lost to illicit operators. No one wins today apart from criminal gangs.”
Amidst the heavy blows to the remote sector, there were minor concessions elsewhere. The government is expected to announce a freeze in land-based casino gaming duty bands for 2026-27. Additionally, Bingo Duty will be abolished completely from its current 10% rate starting in April 2026, a move likely designed to protect the declining land-based bingo sector.
The leak of the 40% Remote Gaming Duty rate confirms the industry’s worst fears: the UK government has chosen to treat the regulated online gambling sector as a “sin stock” cash cow, akin to tobacco, rather than a digital entertainment industry.
The destructiveness of this policy cannot be overstated. A 40% tax on Gross Gaming Revenue (GGR), combined with the existing costs of doing business (levies, software, compliance), will likely push the effective tax rate for some operators above 50-60%. This makes the UK one of the most expensive regulatory environments in the world.
The immediate consequence, as the OBR coldly admits, will be passed onto the player. Operators will have no choice but to slash marketing, reduce odds, and lower Return to Player (RTP) percentages on slots to preserve any margin. This creates a massive value gap between the legal UK market and the unregulated black market.
When a legal slot offers 90% RTP and an illegal crypto-casino offers 96% RTP plus no affordability checks, the migration of players is not a “risk”-it is a mathematical certainty. By prioritizing a short-term £1.1bn revenue grab, the Treasury is actively dismantling the channelisation success story of the last decade. They are incentivising the very black market they claim to oppose, effectively taxing the regulated industry into uncompetitiveness while handing a massive pricing advantage to offshore criminal gangs.
