BGC: UK gambling tax rise is a ‘jackpot’ for the black market
The UK’s biggest betting firms have accused the government of delivering “one of the largest tax hikes on any industry in modern times”, warning that plans to almost double online gambling duties will cost thousands of jobs, drive punters towards unregulated sites and ultimately damage horseracing, despite ministers’ claims to have protected the sport.
The Betting and Gaming Council (BGC), which represents bookmakers and online operators, said the Chancellor’s Autumn Budget had been sold as a victory for racing but, in practice, threatened the wider ecosystem that funds it.
Grainne Hurst, the BGC’s chief executive, said: “This budget means thousands of job losses – not protection for racing.” She added: “The only winner from this Budget is the black market – they’ve hit the jackpot.”
‘Devastating blow’ behind headline protection for racing
Under Rachel Reeves’s plans, Remote Gaming Duty on online casino-style games will rise from 21% to 40% from April 2026, while duty on online sports betting will increase from 15% to 25% the following year. Horserace betting duty, both online and in shops, will remain at 15%, following an intense lobbying campaign from the racing industry.
The Treasury expects the package to raise about £1.1bn a year in additional revenue by 2029. Industry figures and economists argue that the move loads the heaviest burden onto the part of the gambling market most closely supervised by UK regulators, and risks shrinking the very tax base the Treasury is relying on.
In the BGC’s response, Hurst said: “What the Chancellor has actually done is impose one of the largest tax hikes on any industry in modern times. Online gaming duty will soar from 21 per cent to 40 per cent in 2026 – a 90 per cent increase. Sports betting duty will rise from 15 per cent to 25 per cent the following year, up nearly 67 per cent.”
She called the apparent exemption for racing “cosmetic”, adding: “Racing has seemingly been protected from higher betting duties. It sounds like a win, but anyone who understands how the sector operates knows that isn’t true. This exemption is cosmetic. Beneath the surface, this Budget delivers a devastating blow to the very ecosystem that racing relies on.”
Independent modelling by EY, cited by the BGC, suggests the Remote Gaming Duty rise “could cost almost 15,000 high-tech jobs and displace over £4 billion in stakes to unlicensed operators”. The Council says higher sports betting duty “risks another £2 billion moving offshore and a further 1,750 job losses”, putting “nearly 17,000 jobs” at risk overall and pushing “more than £6 billion in stakes” into the black market.
While British horseracing lobbied successfully to avoid a direct tax rise, the BGC argues that the sector will feel the knock-on impact as regulated bookmakers curb spending. Hurst warned: “Betting operators fund sponsorships, media rights and the levy; when the regulated sector contracts, that funding contracts with it. An estimated 500 betting shop closures could cost racing around £20m. Racing cannot thrive if betting is pushed into decline.”
Her warning contrasts with the more measured relief expressed by racing bodies when the Budget was announced. The British Horseracing Authority said maintaining the 15% rate on horse racing betting helped “preserve revenue streams and protect the 85,000 jobs supported by the racing sector across the country”, while acknowledging that wider tax increases on betting could still filter through to the sport.
Fears of black market growth and fragile treatment system
Much of the BGC’s anger centres on what it sees as a widening gap between political rhetoric about safer gambling and the likely consequences of squeezing legal operators. Hurst said: “Steep tax rises layered on top of major new regulation will not make gambling safer. They will do the opposite – pushing ordinary players out of the regulated sector, which protects consumers, and into the illegal, unsafe and highly harmful black market, where none of those safeguards exist.”
She pointed out that “gambling harm in the UK remains low at 0.4 per cent, according to both the NHS Health Survey and the Adult Psychiatric Morbidity Survey”, arguing that “driving customers into an unregulated black market risks this”.
The Treasury itself “predicts a £500m increase in unlicensed activity and has allocated just £26m to counter it,” she said, calling the sum “a drop in the ocean given the scale of the threat, which this very Budget will accelerate.”
The warning comes at a time when the system for funding treatment and prevention is already under strain. The Guardian has reported that charities delivering support for people with gambling problems are facing a “cash crunch” as the government phases out voluntary industry contributions and replaces them with a new mandatory levy of up to 1.1% on operators’ revenues.
According to the Guardian’s coverage, the money – expected to raise about £100m a year – will be channelled mainly through the NHS, which will commission services that used to be funded via the charity GambleAware. But organisations such as GamCare and Gordon Moody say delays and uncertainty around the new arrangements are already affecting frontline services.
GamCare’s chief executive, Victoria Corbishley, told the Guardian: “The uncertainty is causing challenges. We don’t know what commissioners want from us from April onwards. It runs the risk of potential disruption to some of the services, particularly smaller organisations that we rely on.”
Swedish debate and wider policy shift
The row in Britain is being closely watched abroad. In Sweden, the chief executive of the horse betting operator ATG, Hasse Lord Skarplöth, has praised the UK government’s decision to differentiate between higher-risk online casino games and lower-risk horse racing.
Writing about the British Budget, he said the UK is “leading the way” by raising tax on online casinos and online betting from 21% to 40% while leaving horse betting effectively at around 25% once a statutory levy is included. He described it as “tax policy based on risk assessment and social benefit,” arguing: “Horse racing, on the other hand, is seen as part of a wider ecosystem: breeders, trainers, tracks, jobs, events and a living cultural heritage. The British government has concluded that if you tax the horse industry, you bite yourself in the tail.”
In the UK, however, trade bodies insist that even a targeted approach can have unintended consequences if it undermines the commercial foundations of the regulated market as a whole.
Ministers argue that remote gambling, particularly online casino-style products, is linked to higher levels of harm and should therefore carry a heavier fiscal burden, while sparing income tax, national insurance and VAT from increases.
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