Britain’s gambling industry has a rather expensive problem on its hands. Taxes are going up, operators are counting the cost, and some familiar names are already looking at where they can save money. It’s not just a headache for the big companies, either. The changes could affect how the whole market operates over the next couple of years.
The first big change arrived in April 2026, when Remote Gaming Duty jumped from 21% to 40%, putting a much heavier tax bill on online casino gaming. And the pressure won’t stop there.
Nobody Gets a Free Pass
The size of the hit will depend on the business but every well known online casino will be affected.
The next stage comes in April 2027, when duty on online sports betting, excluding horse racing, rises from 15% to 25%.
For operators running several brands, these aren’t small changes that can simply be tucked away in the accounts. We’re talking about millions, and in some cases hundreds of millions, in additional costs.
Flutter Feels the Pressure
Flutter, the company behind Paddy Power, Betfair and Sky Betting & Gaming, has put some hefty numbers on the problem.
The company expects the higher remote gaming duty to cost it around £237 million between April and December 2026.
Flutter reckons cost reductions and changes to marketing can recover about £63 million of that amount. Even so, that leaves an estimated net hit of £174 million over those nine months.
And 2027 looks more expensive still. Once the higher sports betting duty kicks in, Flutter forecasts a gross adjusted EBITDA impact of £400 million. After its planned mitigation measures, the net figure is expected to be around £251 million.
That’s a serious amount of money, even for a company of Flutter’s size.
Its international adjusted EBITDA also fell 19% to $476 million in the second quarter. Flutter pointed to the UK tax increase and World Cup marketing costs as the main factors behind the decline.
Where Do the Savings Come From?
When tax bills rise, companies have to look at the numbers somewhere. Marketing budgets are an obvious place to start, along with staffing, operating expenses and plans for future investment.
The tricky bit is that cutting costs doesn’t always come without consequences, operators still need to attract customers, maintain their platforms and compete with other brands. Cut too much in the wrong places and they could make life harder for themselves further down the line.
There’s also the question of whether some of those costs will eventually feed through to customers. Operators will be looking closely at their margins and deciding which parts of their businesses make financial sense.
The Unlicensed Market Adds Another Worry
There’s a further complication for the industry. The unlicensed online gambling market was growing before the 40% Remote Gaming Duty rate came into force.
Estimates suggest offshore gross gambling yield rose from £200 million in 2019 to £685 million in 2025. Over the same period, the share of online gambling yield retained by licensed operators fell from 97% to 92%.
Those figures suggest the regulated market was already losing some ground before the latest tax changes.
An Expensive Few Years Ahead
The government will be hoping higher duties bring in more revenue, but licensed operators have their own concerns. Higher costs, tougher competition and the growth of unlicensed sites make for an awkward combination.
The next big test arrives in April 2027, when sports betting duty increases again. Until then, expect plenty of number-crunching, cost-cutting and tough decisions across the industry.
Krishnan Guru-Murthy asked John Healey: “Just finally, I mean Andy Burnham has been very clear he wants Britain back in the European Union in his lifetime. Do you?”
The Chancellor replied: “I’m older than Andy Burnham. I don’t expect to see that.”