The Chancellor’s decision to raise taxes for online gambling operators in the most recent budget was initially praised. The idea was that this was a profitable, rapidly growing industry. There was also the social cost of gambling, which was referred to by the Treasury.
They argued that increasing taxes would boost revenue for the government and also move the industry towards less harmful products. However, there has been a cascade of resulting decisions since then.
There are bookmaker shops closing across the country, causing redundancies, and there’s a growing concern that gambling addiction levels might increase as more people turn to black market gambling sites with limited consumer protections.
For the millions of people who play slots games and bet online, their experiences largely aren’t changed, except for some dwindling bonuses. It’s the communities where the shops are closing that will be impacted.
What the Budget Did
The Autumn Budget 2025 was the biggest change in gambling taxes in quite some time. The Remote Gaming Duty, which is the tax on online casino games, increased from 21% to 40% on April 1, 2026.
Then from April 2027 a new General Betting Duty was introduced, bringing the rate up to 25% from its previous 15% level. The government believes that the hike will lead to revenue of £810 million in the first fiscal year, followed by £1.16 billion by 2030/2031.
The government associates online casino games with some of the highest levels of gambling harm. These operators are significantly without contributing a big tax contribution. Land-based gambling was not impacted, as the 15% rate for in-person bookmaker bets is still the same. While on the surface it looks like a smart reform, the reality is somewhat different for the major industry.
Unexpected High Street Consequences
The gambling industry consistently warned before the budget announcement about the possible knock-on impact of tax hikes. Betfred co-founder and chairman Fred Done said that all of its 1,287 shops could be under risk, as well as 7,500 jobs. He said he had never seen a bigger threat to the industry.
The parent company of William Hill, Evoke, made a similar warning about 200 shops having to close, which was confirmed after the budget. The closures will start in May. Paddy Power has shuttered 57 locations and Ladbrokes owner Ladbrokes is facing similarly difficult decisions.
Some people didn’t straight away make the link between the land-based operations and online tax hikes. However, these companies run both land-based and online operations. Their margins are to be significantly impacted by the online taxes and retail operations are not very profitable, which makes them a target of cost cutting.
About 300 of Betfred’s shops were losing money and Done said that even a 5% increase in taxes would put this number closer to 430. He pointed out that recent increases like national insurance contributions and minimum wage are increasing the company’s costs by £20 million with the tax changes. This added effect shows how the retail betting sector is in trouble.
Human and Community Cost
The gambling industry currently supports about 46,000 jobs across the UK and directly contributes more than £1 billion in tax every year, as well as £60 million to local councils through business rates. Industry bodies conduct research that suggests that almost 90% of people who go to in-person bookmaker shops also go to other local businesses on the same trip.
Going to a betting shop isn’t just something that people do to place a bet. They’ll also pass newsagents or stop at a cafe along the way, and it’s one of the last things that draws a regular number of people through the doors of high street locations after the closure or slimming down of operations at banks and travel agents.
This is especially stark in communities with poor traditional retail, as these shops are one of the last remaining hubs of activity, often renting large commercial premises and providing reliable employment to locals, especially younger people and part-time female workers. However, with thousands of jobs potentially being lost due to high street bookmaker shop closures, it’s certainly going to add to the demise of struggling town centres.
The Black Market Warning
As well as the job losses and shop closures, the industry also has concerns about the higher tax rates causing customers to move to unregulated offshore sites. People aren’t going to stop betting, so they’ll look for alternatives.
With operators cutting down their bonus sizes as they try and tighten their belts through the incoming tax changes, maybe people will look elsewhere for more lucrative offers. The Betting and Gaming Council Chief Executive, Groni Hurst, believes that the budget was a big win for the unregulated gaming market, which currently pays no tax in the UK and offers none of the same consumer protections that the regulated sector does.
While the government acknowledged that this was a risk in its documentation, it has decided to contribute £26 million in funding towards the UK Gambling Commission over a three-year period to try to tackle the illegal market. Whether this is enough to make a serious dent in that remains to be seen.
The Industry Response
Major operators have been very transparent in how they plan to deal with the higher costs. Although some of the international diversified groups are better placed to weather the storm than smaller more UK-focused operators, everyone’s going to be hit hard.
Entain, which owns Coral and Ladbrokes, believes that it will cause an EBITDA impact of about £100 million for 2026 and £150 million next year. Flutter, which owns brands like SkyBet, Betfair and Paddy Power, has already relocated its display headquarters from London to Malta, which it believes will save about £55 million in UK tax payments. This means that the UK is losing jobs and tax revenue from these businesses.
Betting in a Changing Landscape
It looks like the tax changes are going to accelerate where and how people in Britain gamble. The demise of in-person gambling is only going to increase as more stores close. The UK Gambling Commission has figures that point towards how the retail sector is only less than a third of the total revenue share for gambling in the UK.
This was more or less 100% only a couple of decades ago, before online gambling became a thing. The economics of having high street betting shops have been deteriorating over the years, before even the tax changes took place, due to rising rent, stock costs and the fact that people prefer the convenience of betting on their phones.
