The dynamics of the UK gambling industry have shifted dramatically following the announcement of nearly doubling the remote gaming duty (RGD) by former Chancellor Rachel Reeves last autumn. Having increased from 21% to 40%, the new tax rate took effect on April 1. This policy has had visible repercussions across the sector, with retail operations shrinking, significant job losses at major companies, and a consolidation of market power among larger players.
This week, current Chancellor John Healey is poised to present his first Budget, adding to concerns that further financial strains might surface as a hike in machine games duty (MGD) looms. This situation invites scrutiny on the ongoing transformations within the UK gambling market since the RGD hike was enacted and speculates on its future trajectory.
The impact of the new tax regime has been significant. The Budget proposal not only raised RGD to 40%, but it also introduced a new general betting duty for remote betting, which will increase from 15% to 25% starting April 2027. Following the tax increase, Grainne Hurst, CEO of the Betting and Gaming Council, described these changes as "excessive" and forewarned of a "devastating hammer blow" to the industry.
Data from the Gambling Commission indicated that by March 31, 2026, the UK had 2,154 licensed gambling operators, marking a slight – 1.1% – drop from 2025. However, it is worth noting that this decline was less severe compared to annual decreases throughout 2017 to 2025. Notably, the overall gross gambling yield (GGY) grew by 4.4% to £17.5 billion, with remote casino, betting, and bingo activities increasing by 6.9%. Ed Birkin, Managing Director at H2 Gambling Capital, remarked that the full repercussions of the RGD increase are still unfolding and suggested that operators maintain a strong competitive drive for market share despite the heightened tax burden, stating that he doesn’t believe it has significantly impacted gross revenue just yet.
However, the consequences have been more pronounced in employment and physical retail operations. In a notable move, Flutter announced a restructuring plan that might result in as many as 1,400 job eliminations in the UK and Ireland. Similarly, Evoke closed about 200 William Hill shops this year, and Betfred revealed intentions to shut 132 locations, with over 600 jobs cut. Bet365 also recently announced a layoff of approximately 340 employees, illustrating the tightening cost management across the board.
Concerns about the industry's future are mounting alongside these job cuts and store closures. Steve Donoghue, CEO of Gambling Consultant, predicted that Flutter's job losses will be just the beginning, forecasting widespread devastation with thousands more positions at risk. He emphasized that such tax increases could drive consumers toward unlicensed operators, exposing them to heightened risks.
Donoghue argued that this push for higher taxes may be politically motivated, suggesting that the industry has been ineffective in countering this initiative. He stated, "Populist left-wing puritanism is resurgent as we see in many forms. "
The fallout from the RGD increase has disproportionately affected retail betting. Over the past year, the total number of gambling premises in Great Britain fell by 2% to 8,081, while retail GGY declined by 3.3% to £2.4 billion. This number may worsen following Healey's upcoming Budget.
A group of Labour MPs has urged for an increase in MGD ahead of the Budget. Current MGD rates are set at 20%, but they are expected to rise, although the extent remains uncertain. The Social Market Foundation has advocated for a doubling to 40%, while others speculate an increase as modest as 5%.
The anticipated MGD hike raises alarms among operators, with Jenningsbet CEO Greg Knight suggesting that a 100% increase could drive up to 100 shops out of business. Betfred owner Fred Done stated that such an increase would jeopardize the very existence of retail betting. "I believe that by 2030 we will have no betting shops," Done claimed. The Betting and Gaming Council also referred to analysis from EY predicting that an MGD rise to 40% could result in nearly 1,500 betting shop closures, 34 casinos, and 16,000 job losses.
Despite these challenges, larger operators seem better positioned to cope with the changing tax environment. For instance, Entain's third-quarter results indicated a 14% year-on-year increase in online net gaming revenue in the UK and Ireland.
CEO Stella David expressed confidence in the company’s ability to manage an MGD hike, claiming it would benefit from market share growth. Flutter CEO Kevin Harrington echoed these sentiments despite announcing significant layoffs, emphasizing their advantage as a prominent player in the UK market.
Richard Clarke, managing director of Flutter’s brands, commented on the business's size and the strategic advantages it brings, suggesting they anticipate gaining market share during these times. Birkin pointed out that while scale would be critical for survival, agility among operators could also play a pivotal role amidst the evolving market conditions. He warned that smaller entities might be disproportionately affected by the shifting landscape, potentially accelerating their decline.
As the UK gambling industry continues to navigate these tax shocks initiated by Reeves' Budget, the forthcoming Budget from Healey will indicate how much harder the next blow will be.
