Rachel Reeves, Chancellor of the Exchequer, finally released the Budget statement this afternoon.
It was never going to please everyone, but it was considered a scandal before it was even officially released, thanks to the Office for Budget Responsibility releasing the Economic and Fiscal Outlook document around an hour early - before Reeves could even take to the floor.
UK Budget Statement
Remote gaming duty will rise from 21% to 40% – from April 2026.
“Remote gaming is associated with the highest levels of harm.”
The duty on bingo will be abolished – from April 2026.
Land-based casinos should be staying current rates.
“No changes to in-person gambling or horseracing.”
A new online sports betting duty will be introduced at 25%, excluding self-service betting terminals, spread betting, pool bets and horseracing. – from April 2027.
A quick analysis
The UK Parliament hopes this will raise £1.1bn by 2029-30.
These are estimated to reduce the yield by around one-third.
Parliament reckons operators will ride these new rates by increasing prices or reducing payouts.
The Government admits this will reduce consumer demand, "which reduces the yield from the measure by £0.5bn."
"We also assume that operators will over time restructure their product offering to minimise tax costs, given the policy creates wide differentials between rates across different forms of gambling."
What does this mean for the black market? "The elasticities used to estimate the demand effect also capture potential substitution to the illicit market."
What could this mean for the industry?
Well, it's certainly not what the industry wanted to hear this afternoon.
It seems like operators can expect to pay twice the amount of tax they are already paying, with the Government expecting them to 'increase prices or reduce payouts' to pay for this.
As for the concerns that this will push players to the black market, the Government confusingly seems to agree with this, saying that the yield being reduced by one-third accounts for "potential substitution to the illicit market."
If operators are taxed more and can offer less in terms of promotions and products, this seems like a credible threat.
Consumers are not the only ones who may leave the UK market.
Ahead of the Budget, Sky Bet relocated its operational headquarters to Malta in a bid to reduce the amount of tax it pays by £55m.
Rumours say that Bet365 are looking to move to the US in a similar fashion to Flutter in 2024.
Several operators have expressed concerns that they will have to close land-based betting shops in response to paying more tax, with thousands of jobs across the UK and Ireland at risk.
A bad example?
The Netherlands recently raised its gambling tax rate to 34.2% of GGR, proceeding to announce this had actually reduced the amount of tax revenue it was generating from gambling.
The UK has now surpassed this rate, suggesting the UK Government has either ignored, misread or dismissed the data of that case study available to them.
Meanwhile, even though retail tax looks to remain steady, it is the overall impact of these tax rates on profitability that may lead to more closures.
"If you build here, Britain will back you," Reeves said during her statement, but it seems like this does not apply to the gambling industry.
The OBR was released around an hour early, with some MPs calling for this to be considered a crime
