UK Government Proposes Unified Tax for Gambling Sector

Online Gambling Takes the Lead

Remote gambling now dominates the UK market. Between April 2023 and March 2024, it generated £6.9 billion in Gross Gambling Yield (GGY). In contrast, premises-based gambling brought in £4.6 billion. Remote operators now hold a 44% market share. Ten years ago, their share was 29%. At the same time, land-based gambling continues to decline. The number of venues has dropped by 29%, and GGY has fallen by 15%.

The UK currently taxes online gambling through three separate duties:

• General Betting Duty (GBD) at 15%

• Pool Betting Duty (PBD) at 15%

• Remote Gaming Duty (RGD) at 21%

These rates stem from older distinctions between betting and gaming. However, those differences no longer reflect how players interact with online platforms. The Treasury now argues that a unified system would better suit today’s market.

A Single Tax and Return Process

Under the new plan, the government would replace the three duties with a single Remote Betting & Gaming Duty (RBGD). Operators would register once and submit a single quarterly return. Today, some operators must file up to 12 returns each year. The Treasury expects this change to cut administrative work for both companies and HMRC. It would also reduce confusion and the risk of errors.

RBGD would apply to all gambling offered through remote communication. That includes internet, mobile, television, radio, and similar technologies. The government wants to align the tax with current definitions used in the Finance Act 2014 and Gambling Act 2005. These definitions already cover most remote gambling services.

Self-service terminals in betting shops and telephone betting would also fall under RBGD, unless already taxed under existing duties.

Proposed Changes for Free Bets and Bonuses

The government proposes a consistent treatment of free bets and freeplays across all remote gambling. Free bets would have a notional value and count as stakes. Winnings from them would remain deductible. For freeplays, only the first use would be taxable. Operators could deduct winnings only if they result from a successful round. The goal is to close loopholes that allow avoidance through complex bonus structures.

The government plans to align the rules for non-cash prizes. Operators could deduct the value of these prizes only if won in a successful round. Cashback or consolation prizes based on losses would not qualify for deductions.

Exclusions and Special Cases

The proposed RBGD would apply only to remote gambling. Land-based activities would continue under existing rules. Spread betting, which mostly involves UK-based firms, would stay taxed on a place-of-supply basis—at least for now.

The consultation remains open until 21 July 2025. If adopted, RBGD could come into force in October 2027 or later. This would allow time for new legislation and updates to HMRC systems. Operators, trade bodies, and public health groups are invited to respond through the official government platform.