Autumn Budget 2025: Gambling Duty Reforms

In the Autumn Budget, the Chancellor announced the following package of gambling duty reforms with the aim of raising over £1 billion per year:

• From April 2026, there will be an increase in the rate of Remote Gaming Duty (RGD) from 21 percent to 40 percent and Bingo Duty (currently charged at 10 percent) will be abolished;
• From April 2027, a new rate of General Betting Duty (GBD) for remote betting will be introduced at 25 percent (currently charged at 15 percent); and
• Casino Gaming Duty bands will be frozen until 2026-2027, with the usual RPI uprating thereafter.

No changes to the rate of tax of Machine Game Duty were announced.

The 15 percent rate for bets placed in licensed bookmaking premises remains unchanged, recognising that land-based betting generally has higher overhead costs than online betting.

As a result of the unique circumstances of the horse-racing industry and the fact that operators already pay a 10 percent statutory levy for horse-racing bets, the Government will exclude remote bets on horse-racing from the new online GBD rate (i.e., those bets will remain taxed at 15 percent whether the bet is made in-person or online).

Off-course pool bets made on horse-racing or dog-racing will also continue to be taxed at 15 percent, as will all bets placed using self-service betting terminals. Financial and non-financial spread bets will continue to be taxed at rates of 3 percent and 10 percent respectively.

Both RGD and GBD are taxed on gross gambling profits. Affected B2C betting and gaming businesses will therefore need to:

• Model how these significant rate increases will impact their margins;
• Assess how the additional costs could be managed i.e., whether to pass on the rate hike to customers through the online games offered and the odds they set on sports events (which may end up differing depending on whether the bet is placed physically vs online); and
• Update systems and controls to manage and report on profits generated from the different categories of sports betting activity and the GBD amounts consequently due.

With regards to the second point above, the risk posed with passing the additional costs on to customers is that it may push more people into the hands of the unregulated illicit market. To counter this, an additional £26 million of funding will be provided to the Gambling Commission over the next three years to tackle the illicit market.

In its April 2025 consultation on The Tax Treatment of Remote Gambling, HM Treasury (HMT) expressed a desire for “moving to a single tax for UK-facing remote gambling” and to “create a simpler, streamlined system that is easier for operators to navigate”.

Whilst things have moved quickly on from that consultation in the eyes of the Government, it is difficult to see how the reforms announced in the Budget reconcile with HMT’s stated objectives.

An additional category of GBD means that businesses who offer sports betting both remotely and physically will have two different rates of tax to contend with. Where those businesses offer bets on horse-racing there will be an additional layer of complexity to consider.

Please let your usual KPMG contact know if you would like a call to discuss this further.