An Office for Budget Responsibility (OBR) statement accidentally published ahead of schedule has revealed that Chancellor Rachel Reeves plans to raise the remote gaming duty rate to 40%, effective April 2026.
Gambling stocks fell sharply as markets reacted to the unexpectedly steep tax hike. While industry observers had anticipated a top tax band of 30%-35%, the increase from the current 21% to 40% goes significantly further than forecast.
According to the OBR document, the changes are projected to generate £1.1bn in additional revenue by 2029, much of which is expected to help address the government’s fiscal deficit.
From 2027, the government is also set to introduce a 25% general betting duty, excluding self-service betting terminals, spread betting, pool betting and horse racing. This indicates that horse racing will receive the anticipated exemption after heavy lobbying from the sector.
Additionally, the government is expected to freeze casino gaming duty bands for 2026-2027, with standard RPI-based increases resuming afterward.
The OBR outlined likely market reactions, noting that behavioural responses remain uncertain. The agency estimates operators may pass through around 90% of the increased duty by raising prices or reducing payouts, moves that could dampen consumer demand and lower the expected tax yield by about £0.5bn by 2029-30. The modelling also factors in possible shifts to illicit gambling and substitution between gambling products due to widened tax differentials. Over time, operators are expected to restructure their offerings to mitigate tax costs, reducing revenue by an additional £0.1bn.
The early leak of the document drew criticism in parliament this morning, with MPs condemning both the error and the extensive pre-budget briefings shared with the media.
