Leaked plan for 40% tax on casinos: who will survive?

The British online gambling industry is experiencing unprecedented turbulence. The leak of a budget document revealing a possible 40% tax on remote gaming sent shockwaves through the industry, shaking markets and causing concern among operators and investors alike. 

A tax earthquake shakes the online gaming industry

A leaked document from the UK’s Office for Budget Responsibility (OBR) has revealed a tax reform plan on an unprecedented scale: remote gaming duty could rise from 21% to 40% from April 2026. This announcement immediately sent shockwaves through the financial markets and provoked strong reactions throughout the industry.

On the one hand, the government estimates that it will be able to raise £1.1 billion a year by 2029-2030 thanks to this reform. On the other, operators and investors fear dramatic consequences for the industry – financial crisis, redundancies, withdrawal of players, even tax exodus.

What is the scale of this upheaval? What impact will it have on players, businesses and the online betting business model in the UK and, in all likelihood, across Europe?

A sudden increase

The increase in remote gambling tax – from 21% to 40% – represents a near doubling of the rate applicable today. For online casinos, poker platforms, mobile casino games and other remote gambling services, this is a profound change. They were only expecting an increase to 30-35% before the draft leaked.

In addition, the reform provides for a new regime for remote betting: from April 2027, the rate applicable to online sports betting (excluding horse racing) will rise from 15% to 25%. However, shop betting, traditional games and horse racing will not be affected – nor will the rate for bingo, which will be abolished altogether. 

Initial damage: stock markets and operators on alert

Following the leak, the shares of the major groups in the sector – Entain, Flutter Entertainment, Evoke Group – immediately plummeted, with some stocks losing up to 20%.

According to the operators’ internal estimates, the additional cost for Entain could reach £150 million a year from 2027. For its part, the Rank Group is announcing a reduction in its annual operating profits of around £40 million, despite the partial benefit due to the abolition of the bingo tax.

Some players, particularly those with fragile business models, are anticipating steep losses.

Employment risks, consolidation and flight abroad

The industry fears that these measures will lead to massive job losses. Many companies could reduce their workforce, or even withdraw from the UK market if the business is no longer profitable.

Some have already taken steps: the Flutter Group’s online betting platform has moved its headquarters to Malta, in anticipation of the forthcoming tax burden. Analysts predict further relocations, mergers or takeovers, which could concentrate the market among a few giants with sufficient resources to absorb the shock. 

For small operators, niche platforms and recent sites that have not yet reached financial maturity, the threat is particularly strong: with no room for manoeuvre, many risk disappearing.

Players and the black market 

Faced with a massive increase in costs for operators, one of the major fears is that they will pass on the increase to players – through reduced winnings, more difficult withdrawals, or new restrictions. Others may simply close the door to the UK.

But beyond the regulated market, it is the risk of a mass exodus of players to offshore, unregulated platforms that is worrying. In this context, the sector could see an intensification of the black market, with no protection for players, no guarantees on payments or responsible gambling.

Paradoxically, the government’s stated desire to reduce gambling-related harm could divert some users to illegal operators, with all the risks that entails (scams, unregulated addiction, irreversible financial losses).

The leak of a proposed 40% tax on online gambling marks a turning point for the British gambling industry. With reduced profits, threats to jobs, a possible explosion of the black market and a reshaping of the sector, the future looks turbulent. For operators and players alike, 2026 could well mark the end of a golden age – and the beginning of an era of great uncertainty.