No one wants to be the least favourite child, but it happens; and in the Budget, it was clear this was the online casino industry. The 40% tax figure has been impossible to avoid since it was leaked by the OBR and, on the surface level, it seems like an easy dunk.
Protecting the High Street?
According to the latest Gambling Commission FY25, online casinos made £5bn ($6.6bn) in GGY, compared to £933.8m from land-based casinos and £640.4m from non-remote bingo. Online casinos also have less staff, sundries and bills to pay, and on paper they can afford a 40% tax rate.
But that does not make the Budget any less striking. To almost quote Dr Ian Malcolm from Jurassic Park, "your financial advisors were so preoccupied with whether or not they 'could' that they didn't stop to think if they 'should.'"
To Reeves' credit, she is keeping land-based operations at their current rate and scrapping bingo duty altogether. This will go a long way in protecting UK high street jobs, especially for smaller operators that don't have online operations to offset any headwinds. This decision was celebrated by many in the industry, especially after the months of lobbying to protect these sectors.
We've saved the UK jobs, we all cry at once - but is this really true?
The inevitable impact
Multiple operators have already warned that increasing online taxes will still lead to job losses, including those based on the High Street. Flutter has already announced the closure of 57 shops across the UK and Ireland, with 250 jobs on the line and now many more at risk. Not to mention companies potentially less incentivised to invest in the UK space with such unfavourable tax rates.
For the sake of the narrative, however, let's put on our rose-tinted glasses and say that no jobs will be lost. We've protected all of the UK jobs that were under threat from this Budget. But have we protected the players? Well, still no.
Chancellor Reeves said "remote casinos are more associated with harm" than other forms of gambling, which is why this sector has been targeted with such a steep increase. Going back to the FY25 industry statistics, 75.2% of non-remote casinos' GGY comes from casino table games, which require people to socialise with the dealer and often the other players at the table. By comparison, 83.5% of online casino GGY came from slots. If they were targeting the lonely player, they were spot on.
It's much harder to walk into an unlicensed land-based operation than it is to stumble across an offshore online casino. In a recent study by Deal Me Out, only 10 out of 194 members of the public could correctly identify regulated casino websites from unregulated ones, meaning the risk of players accidentally (or deliberately) playing on these sites is eye-wateringly high.
A lack of deterrent
The "potential substitution to the illicit market," as the Budget worded it, has about the same level of potential as the sun setting this evening and rising again in the morning. It is already happening and the latest figures estimate at least £2bn a year is lost to the black market; £2bn a year that could be taxed and put to good causes within the UK, but now can't.
If a player joins an illegal site because they want to use a bonus not offered by legitimate casinos, and they get on with the platform, what is stopping them from moving the rest of their betting activity over there? These sites offer sports betting, much larger game libraries and even illegal streams of games that players may struggle to find elsewhere.
This Budget has promised land-based operators and the horseracing industry that it acknowledges the leaks in their respective toy boats and is doing everything it can to keep them afloat; all while ripping the plug out of the bottom of the bath and letting the GGY drain away to unlicensed and untaxed offshore entities.
It doesn't really make sense, does it?
Super Group went against the grain and welcomed the UK Budget, potentially as its international operations are impacted far less by the market than the likes of Flutter Entertainment, Entain, Rank Group and more
