Do the UK gambling tax changes have any bearing on lotteries?
The UK government has gone through with a widely anticipated overhaul of gambling taxes, and while lotteries are unaffected by HM Treasury’s plans there may be knock on effects.
Announced yesterday by Rachel Reeves, Chancellor of the Exchequer, the tax hikes will see Remote Gaming Duty (RGD) on online gambling increase from 21% to 40% in April next year and General Betting Duty (GBD) on bookmaker bets go up from 15% to 25% in March 2027, while bingo duty is scrapped entirely.
Lotteries will not be subject to this. Lottery firms do not pay RGD or GBD, and while the National Lottery pays a 12% levy on ticket sales, private lotteries and large charity lotteries like the Postcode Lottery and small-scale fundraising lotteries do not pay this, with the government instead taking note of lotteries’ good causes funds.
The impact of the tax raises will be far reaching, and bookmakers and casinos have been quick to condemn the new framework as being disastrous for the industry.
Flutter, Entain and Evoke have all argued that the tax raises will ultimately lower tax intake and drive customers to the black market, as a result of operators putting protective measures in place to safeguard margins.
The trio of companies have also stated that they will likely reduce marketing budgets to compensate for the heavier tax burden. Flutter, for example, revealed that it expects to reduce promotional and marketing spend by 20% over the first six months after the new tax implementation, and 40% thereafter.
Chris Daly, CEO of the Chartered Institute of Marketing (CIM), said: “The proposed reforms to gambling taxes – with remote gaming rates rising from 21% to 40% and online betting to 25% – could pose pressure on marketing budgets across the gaming sector.
“As companies adjust to these increased costs, marketers will be faced with the challenge of reaching audiences effectively using fewer resources.”
So, why is this significant for lotteries? After all, lotteries themselves will not have to pay more tax, only bookmakers and casinos will. The answer is speculative, but with betting and gaming in the UK becoming an increasingly costly business, some of the biggest PLCs may look to other business ventures.
The US predictions market space may be a good example of this, with Flutter having already set up its entry into the sector via its FanDuel asset. It could, theoretically, also turn its attention to lotteries, a space it is already involved in.
One of Flutter’s biggest international assets is Sisal, an Italian gaming firm which is also the operator of the Moroccan National Lottery, and was previously a contender to become the operator of the Italian Lottery.
Hypothetically, the stability of long-term lottery contracts could provide gambling firms with a vital commercial lifeline as tax increases bite into margins not just in the UK but also in France, Germany, the Netherlands, and various other places. Only time will tell.
https://lotterydaily.com/2025/11/27/highlighted/uk-gambling-tax-lotteries/