Autumn Budget 2025 – gambling duties - “in-person” good, “remote” bad

This time last year, the Chancellor (in her first Budget) announced a consultation into the idea of merging together the three gambling excise duties that apply to remote gambling; namely, remote gaming duty, general betting duty and pool betting duty.  This idea, which was consulted on during the Spring and Summer, was advanced by HM Treasury as a simplifying measure, albeit the gambling industry suspected that it was part of a move to increase levels of duty on remote gambling.

Fast-forward to yesterday’s Budget and the idea of harmonisation and simplification has been booted firmly into touch and industry fears of increased levels of duty on remote gambling have been realised.  Rather than simplification, we now have the prospect of:

• material differences in the rates at which different types of remote gambling will be taxed (with material increases in rates for some); and
• further differences in the way in which certain forms of “in-person” gambling will be taxed (with decreases in rates for some).

In the paragraphs below, we summarise how the UK’s 7 gambling excise duties are to change (or not) following the Budget and give brief comment on the changes.

Remote Gaming Duty (“RGD”)

As expected, RGD is to increase.  From April 2026, it will be charged at 40%.

That RGD would increase was expected, particularly following the report of the Treasury Select Committee (on 7 November 2025) and the hostile commentary that preceded that report.

The increase (from 21% to 40%) is clearly very material.  Whilst higher than operators will have hoped for, it is not as high as the 50% that was feared by some (following suggestions from former Chancellor, Gordon Brown, amongst others). 

Trading in the shares of affected listed gambling groups following the Budget announcement was mixed.  Having all dropped initially, Entain and Flutter were soon up leaving only Evoke remaining down on the day.  A material hike in rates was well-trailed and clearly “priced in”.  However, it remains to be seen how the industry will react to such a material increase.  By how much this rate rise will increase the size of the unregulated “black” market will be something that will be watched closely (we noted, with interest, that the OBR report acknowledged “potential substitution to the illicit market”). 

General Betting Duty (“GBD”)

As was clear from the gambling industry’s responses to the consultation and the efforts of the horseracing industry and the high street bookmakers (amongst others) in the press, the Government has realised that GBD is not, in reality, a single tax.  It is a multitude of taxes applying to different verticals applied at different rates (e.g. fixed odds bets (15%), certain pool bets (15%), financial spread bets (3%), non-financial spread bets (10%), etc.) that applies equally to both remote and “in-person” betting.  Given this, the Chancellor has decided not to increase rates for all affected verticals in the same way (this being the Treasury’s previous idea, per the consultation, for bets placed remotely).

However, as seemed likely, the rate of duty on (most forms of) remote betting is to increase. The current rate of 15% will increase to 25%, from April 2027.

Government has now decided to introduce further differences between the various verticals within the scope of GBD as follows:

• GBD payable on “in-person” betting will remain at 15%.  This represents a good result for those affected, such as high street shops.
• Self-service betting terminals in shops will remain at 15% (i.e. in effect, they will be treated as “in-person” rather than “remote”).  This represents a victory for those affected operators who responded to the consultation, firmly and in unison.
• Pool betting (subject to GBD) will remain at 15%.  Note that this “non-change” applies to GBD rather than PBD, which means that horseracing and dog racing pool bets (being those types of pool bet that fall within GBD) will remain at 15% even when those bets are placed remotely.
• All horse racing bets will remain at 15%, even when placed remotely.  This picks up fixed odds bets on horse racing (as well as pool bets, as mentioned above).  This should be well-received by the horseracing industry following their campaign for different treatment (given that bets on horseracing typically attract the Horserace Betting Levy, at 10%, in addition to 15% GBD, such that the effective rate is already 25%).
• Rates of GBD applicable to spread betting will remain as they are currently (namely, 3% for financial spreads and 10% for everything else, including spread bets on sport, elections, etc.).   Spread betting operators will be pleased, given that the consultation idea of harmonisation would have resulted in material rate rises.
• Remote betting that does not fall into any of the above categories is to be treated differently from April 2027 onwards, with a new rate of 25%.  This was widely expected.  However, the rate will be higher than was hoped for, albeit that the rate rise will come into effect a year later than the rate rise applicable to RGD.

Pool Betting Duty (“PBD”)

There was no mention at all of PBD, which means that it will remain at 15%.  PBD raises a (relatively) tiny amount of duty for the Exchequer and, to the extent that it applies to remote gambling, it appears to be a type of gambling (the football pools being a good example) that the Government does not look upon unfavourably.  (Note that, confusingly, the duty that applies to pool bets on horse racing and dog racing is GBD, not PBD.)

Machine Games Duty:

There was also no mention at all of MGD.  Given that MGD was referred to expressly in the report of the Treasury Select Committee on 7 November 2025 (that report called out MGD as a duty that should always be charged at a higher rate than Gaming Duty – this actually makes little sense, given the differences in how the duties are levied) and was another duty where some commentators were calling for material increases, there was real concern that rates would increase.  Affected operators will be very relieved.  This represents another win for “in-person” gambling.

Gaming Duty

Gaming Duty (which is charged on “in-person” gaming) is charged at stepped rates which apply above different thresholds of gross gaming yield.  Such thresholds are typically increased annually, in line with inflation.  This year, unusually, these bands have been frozen (for a year).  This represents a (modest) rise in rates for physical casinos.

Bingo Duty

The big surprise of the day was the announcement that Bingo Duty (which is charged on “in-person” bingo – currently at 10%) will be scrapped next April.  This should represent a material boon for struggling bingo clubs.  This unexpected cut (plus MGD not being increased) was reflected in Rank Plc’s share price, which rocketed by c.10%.  (NB that, confusingly, remote bingo is subject to RGD, not bingo duty.)

Lottery Duty

There was no mention of any change to Lottery Duty, and none was expected.

Comment

In isolation, the Government abandoning its idea of harmonising remote gambling duties is a good thing.  The idea was based on the false premise that different types of remote gambling are similar purely because they are accessed remotely.  Had the rules (applicable to remote gambling) been consolidated, no real simplification would have been achieved in practice.

GBD has always been different from other duties in that (in addition to covering different verticals) the one duty applies to both remote and “in-person” bets (contrast the different duties applying to gaming and bingo).  That GBD would be split in two versions (“remote” and “in-person”, with different rates applying to each), was always expected – from the outset, the consultation made it clear that in-person betting was to be excluded from the then proposed changes (now abandoned). 

We expect that the changes to GBD will be effected by the creation of a new “remote” limb of GBD, which will apply to fixed odds bets which are made remotely on events other than British horseracing.  By keeping this as part of GBD, the Government can make the claim that they have “simplified” the rules by getting rid of one of the UK’s 7 gambling duties (Bingo Duty) without replacing it with a new one (“remote gambling duty”).  The reality is that this Budget has added additional layers of complexity.

What is surprising is the suggestion that the Government can somehow alleviate the perceived harmful effects of certain types of remote gambling via taxation policies, rather than regulatory ones.  This seems to us misplaced.  Taxation policies tend to affect businesses in accordance with “Laffer” principles; the cost of rate increases can either be absorbed (with those costs being passed onto customers in the form of less attractive products) or they will prove to be too expensive to bear (such that certain business lines become unprofitable and so will be abandoned). 

The increases in the rates of RGD and (the new “remote” version of) GBD will certainly result in either less attractive products for customers (e.g. fewer freeplays / free bets – since these attract duty) or in certain products being abandoned.  In either case, this will benefit black market operators; the relative attraction of their offerings will increase significantly, since they don’t pay tax and can, for example, offer freeplays and free bets without cost implications.  Consequently these changes will inevitably result in some growth to the black market.  The question that everyone should be concerned about (including Chancellors, past and present) is: by how much?