Gambling companies in the UK, including major players like Flutter Entertainment and Entain, received a welcome break as the UK government’s Autumn Budget left gambling tax rates unchanged, postponing an anticipated tax increase for the industry. While the sector may face tax hikes in the future, the delay gives operators more time to prepare.
A sudden tax increase could have strained the regulated market
The absence of a tax hike in the Budget, announced by Chancellor Rachel Reeves, was met with enthusiasm across the industry, boosting share prices for Flutter and Entain to near pre-October 11 levels, at 234.51 and 767.20, respectively.
The industry’s reaction was overwhelmingly positive, as many feared a potential increase in Remote Gambling Duty (RGD) that could have doubled taxes on “higher harm” gaming products. Currently, RGD stands at 21% of operator profits and could have risen to 50%, potentially creating significant challenges in an already regulated environment.
This delay offers much-needed stability. Flutter CEO Peter Jackson, who had previously criticized the proposed £3 billion tax hike, emphasized that stable fiscal policy is essential for a competitive market. Other industry leaders echoed his sentiment, warning that steep taxes could heighten competition and have counterproductive effects.
Government plans for comprehensive tax reforms
While the Autumn Budget introduced other tax changes, such as increased employer contributions and adjustments to capital gains taxes, the gambling sector was spared. Reeves stated that the government will conduct a tax review next year, aiming to simplify the existing tax structure for the gambling sector.
Currently, operators pay 21% in Remote Gambling Duty, 15% in General Betting Duty on net stake receipts, and 15% in Pool-Betting Duty. The proposed review aims to consolidate these taxes into a single structure, which Reeves believes would streamline administrative processes and close loopholes in the system.
“The government will consult next year on proposals to bring remote gambling into a single tax rather than taxing it through a three-tax structure,” stated Chancellor Rachel Reeves.
Industry insiders acknowledge that tax reforms could still come into effect by 2025 following consultations. However, the delay has provided operators with breathing space, and many remain hopeful that industry representation will help negotiate a balanced approach before any significant changes are implemented.
