The UK gambling industry is facing significant tax reform challenges. Zoe Feller, a partner at Bird & Bird law firm, issued a warning at the Global Gambling Network seminar that the government's proposed unified reform plan for remote gambling tax could create an "economically unviable" industry environment, calling for active industry participation in the ongoing policy consultation.
Tax reform plan raises industry concerns
In April this year, the UK Treasury proposed consolidating the current three-tier remote gambling tax system into a single tax rate:
Remote Gaming Duty (RGD): Currently taxed at 21% of profits
General Betting Duty (GBD): Current rate is 15%
Pool Betting Duty (PBD): Levied at 15% of net betting revenue
The industry is concerned that the new scheme might unify all verticals' tax rates to a high of 21%. Feller emphasized: "The worst-case scenario is a tax rate exceeding 21%, which would jeopardize the entire industry's viability."
Key gambles during the consultation window
The government consultation will last 8-10 weeks, ending on July 21. Feller urges businesses to submit their opinions through industry associations or on their own: "The more comprehensive the data the government has, the more likely it is to establish a reasonable tax system." She specifically pointed out a loophole in the proposal—the rapidly growing but loosely regulated lottery business is not included in the tax scope.
Dual challenges: Compliance costs and black market risks
The reform faces two major controversies:
Operational burden: The new tax system requires companies to rebuild financial systems, with an expected increase in compliance costs of 15-20%
Black market allure: Gambling Commission CEO Glanny Hurst warns that higher taxes could drive 30% of players to illegal platforms
Industry backlash and policy paradox
Data from the British Gambling Association (BGC) shows that the 2024 White Paper reform has already caused the industry to lose over £1 billion. Hurst pointed out: "Increasing taxes during the industry's recovery period contradicts the initial intent of increasing fiscal revenue and hits the legal market." Gambling consultant Steve Donoughue added: "Black market operators offer higher odds, and for every 1% increase in tax rate, their market share is expected to grow by 2-3%."
Forward-looking impact
The government will announce the final plan in the Autumn Budget of 2025. Analysts believe that if radical tax reforms are implemented, it could lead to:
Small and medium operators exiting the market
A reduction in industry investment by 20-25%
Expansion of the black market to £4 billion (currently about £2.5 billion)
This tax reform battle not only concerns industry profits but will also determine the future landscape of the UK gambling market—whether to maintain balanced regulation or force businesses out and players into the grey area.
