UK’s Chancellor of the Exchequer, Rachel Reeves, has announced the November budget. The bones of the deal were hardly a secret, with early announcements, warnings, and even leaks meaning that a lot of the content was already being discussed before Wednesday’s reveal. Particularly bashed by the announcement were online casinos and online gambling in general.
For the UK gambling industry, a lot of the relevant content had been widely disseminated, but there was still a surprise or two in there.
Land-based betting safe, remote gambling not so safe
First, the embattled horse racing industry may live to fight another day. Taxes on horse racing betting, whether online or in betting shops, will remain at 15%.
In fact, betting shops fare well generally – the threat of thousands of locations across the country closing their doors, perhaps causing Reeves to leave them alone.
General betting duty paid on other sporting event bets will remain at 15% in betting shops. And, despite rumours to the contrary, machine betting duty has also been held at its current position.
Online betting takes a huge hit
However, it isn’t all rosy for sports betting. Online sports bets will retain the current 15% tax for now, but this will increase to 25% in April 2027.
And, in a further raid on online gambling businesses, online casinos will see tax rates almost double, from their current 21% to 40%, effective from April 2026.
The increases are expected to make the government an additional £1.1bn by 2029/2030.
Announcing the changes, Reeves said: “Remote gaming is associated with the highest levels of harm and so I’m increasing remote gaming duty from 21% to 40%, with duty on online betting increasing from 15% to 25%.
“I am making no change to the taxes on in-person gambling or on horse racing and I am abolishing bingo duty entirely from April next year. Taken together my reforms to gambling tax will raise over £1bn per year by 2031.”
The plight of UK horse racing
The horse racing industry has been facing struggles in the UK for years. Just this week, the Gambling Commission released figures showing a 6% year-on-year decline in betting revenue.
Following early indications that the Chancellor was considering bringing horse racing in line with online gambling, in terms of the tax it pays, industry figures spoke out against the move.
Major bookmakers said they would be forced to close shops, and the entire horse racing industry held a one-day strike in September.
Sky Bet even moved its headquarters from the UK to Malta ahead of the budget, meaning the Government will lose out on tens of millions of pounds in taxes.
However, prominent political figures, including former Prime Minister Gordon Brown, and other government-led thinktanks, claimed that increasing tax rates could raise billions of pounds a year.
While the figure was refuted, it appears the Government has offered up a compromise. The horse racing industry and high-street bookmakers are safe. For now.
On the other hand, the move does still mean a significant increase in costs for online gambling companies. Experts have said the reduced operating profits will mean lower bonuses and worse prices for bettors.
Many will turn to the black market, according to some figures, and this will not only cut into the projected tax revenue but it will lead to potential redundancies in the industry. The reduced player protection offered on the black market may also lead to increased problem gambling – which is a whole other issue Reeves will be left to deal with.
