UK remote gaming tax receipts up by 108% – so did the rate hike work?
Provisional data suggest that the tax hike announced last Autumn has been a success for the Treasury, though industry figures say more data is needed to reach a conclusion
Provisional data released by HMRC indicates that July’s remote gaming duty (RGD) receipts increased by more than 108% year-on-year, from £283m to nearly £590m.
In last year’s autumn budget, after much argument and debate, RGD rose from 21% to 40%, general betting duty (GBD) was set to move from 15% to 25%, and bingo duty was abolished.
The increase in GBD will not be effective until 2027, but the other two changes came into force from April 2026.
While HMRC’s annual publication reports the tax yield for all betting and gaming taxes from August 2025 through to the end of Q2 2026, it is the July figure that offers the first chance to assess the impact of the tax rises.
Taking into account the full range of gambling duties, the 2026/2027 financial year to date (April to July) provisionally produced £1.93bn, 19% or £309m more than the same period last year.
Of that total, 50% came from RGD.
Does this prove the doubters wrong?
Potential tax rises are always hotly contested, and in this case, the arguments against were manifold.
One case study presented the Netherlands as an example of failed tax policy, where subsequent drops in GGR saw tax rises deliver just €2m in additional revenue in 2025, compared to an initial target of €108m.
Critics of a bumped up RGD have questioned whether changes in consumer behaviour have been sufficiently considered, and argued that in the Netherlands, there was clearly a backfiring effect where the restrictions pushed players from the regulated to the unregulated market.
This relationship between rate and yield can be visually represented by the economic concept of the Laffer curve.
In a Treasury Committee hearing before the budget was announced last year, the Social Market Foundation’s (SMF) Theo Bertram suggested that the comparison between the UK and the Netherlands was not a fair one.
He pointed to the permissive culture in the Netherlands and a complex judicial system that was poorly equipped to take on the black market.
Stewart Kenny, co-founder of Paddy Power, explained that the better analogy is Ireland, where a doubling of taxation resulted in a doubling of the take.
Derek Webb was one of those who argued the UK’s remote gaming sector could absorb a higher tax rate, and for the time being, this now appears to have been the case, though the trend will have to be sustained to convince everyone.
In fact, Webb has argued that there is scope for an even higher levy – he told NEXT.io: “If some remote operators cease trading that will not impact total turnover but it will reduce the total expenses of the sector and therefore increase gross profits. I stand by my submission to last year’s Treasury consultation that by taxing to the peak of the Laffer curve there is scope to increase Remote Gaming Duty to 60%.”
Is the data insufficient?
Stephen Hodgson, currently VP of tax at Midnite, was an industry voice during that Treasury committee meeting last year and took issue with the point about Ireland, arguing that the country’s retail landscape was decimated as a consequence of the rate changes.
Speaking to NEXT.io, Hodgson expressed his lack of surprise at the HMRC data.
He said: “We would have expected a boost in the first quarter of the new rate whilst the market is still settling into the new reality and operators are waiting to see how it plays out.”
Before reaching a conclusion about the real impact, Hodgson believes the industry will need 12-18 months of post-increase data.
Back in August, Regulus Partners similarly shared a note anticipating that early boost, and the advisory firm’s co-founder Paul Leyland has now reiterated this view to NEXT.io, saying: “Quite a few operators are trying to hold their nerve on bonuses hoping others will fold first.”
In the August note, Regulus further detailed how, for the time being, the costs of the increase had not been passed on to consumers, with operators focusing on cutting costs elsewhere. However, Leyland believes this is not sustainable and that the resultant customer habits will “take a few months to change since Q2 revenue is largely decided by Q1 depositing.”
The note explained that Q2 2026 was always likely to look like this, and reads: “We had forecast the impact of the tax rise to play out in H226 and especially H127; we are likely to be upgrading gaming for FY26, but largely at the expense of betting and shifting the impact out a little further – our bearish view on 2027 (gaming -12%) remains unaltered.”
However, Regulus also admits that there is no data yet to back this up.
The ripple effects
The downstream impact of the tax hike in Ireland that Hodgson referred to was the ongoing shuttering of betting shops – in October 2025, when he spoke at the Treasury Committee, more than 120 had closed since the 2019 tax increase.
The Betting and Gaming Council (BGC) stressed this aspect of the reform in its comments to NEXT.io.
A spokesperson for the trade body said: “The real test of these tax rises is their impact on jobs, investment and businesses across the regulated sector.”
They added: “The BGC repeatedly warned that last year’s budget would cost jobs, close businesses and damage growth. By the end of 2026, more than 600 betting shops will have closed and over 10,000 jobs lost across the industry since that budget.”
Machine gaming duty
It is those and other impacts that the BGC and many industry stakeholders will be urging the government to consider before finalising this year’s autumn budget.
Chancellor John Healy is currently considering whether to double the machine games duty (MGD) from 20% to 40%.
Grainne Hurst, CEO of the BGC, said: “Our members stand ready to invest, create jobs and support communities across Britain. The government should build on the success of its modernisation reforms, not undermine it with further tax increases.”
According to the new HMRC data, MGD for July yielded nearly £105m, a marginal decrease from last July’s £108m figure.
In a new note, Regulus Partners has maintained that an increase to 40% would diminish that figure further and cause more than 4,000 betting shops to close after three years.
Though the significance of this HMRC data is contested, with the budget due to be announced on 28 October, the immediate leap in remote gaming tax revenues may well encourage the Treasury that now is the time to act.
https://next.io/news/regulation/uk-remote-gaming-tax-up-108pc-did-hike-work/