N※N

UK Raises Gambling Tax to 15% in 2025, OBR Projects GBP2.3 billion Extra Revenue

85

  //business-finance.news-articles.net/content/202 .. 5-obr-projects-gbp2-3-billion-extra-revenue.html
  Published in Business and Finance on Wednesday, November 26th 2025 at 9:48 GMT by reuters.com

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-11-26 251 x 201 / 10326 Bytes

2025-11-26 251 x 201 / 15661 Bytes

2025-11-26 251 x 201 / 10725 Bytes

2025-11-26 217 x 224 / 7090 Bytes

UK Gambling Tax to Rise in 2025: OBR Forecasts Big Revenue Gains

On 26 November 2025, the UK government announced a significant hike in the tax rate applied to gambling operators, a move that the Office for Budget Responsibility (OBR) has projected will generate an extra £2.3 billion over the next five years. The policy shift, introduced by the Treasury in consultation with the Gambling Commission and supported by the latest OBR review, is part of a broader strategy to fund public services while addressing concerns about gambling‑related harm.

The Tax Change in Detail

Under the new regime, the tax on “gross gambling yield” (GGY) will rise from 12 %—the rate that has been in place since 2016—to 15 % for the 2026‑27 financial year. The OBR report, released a week earlier, outlines the mechanics of the calculation:

• Gross Gambling Yield – the difference between the total amount wagered on a platform and the total payouts to players, adjusted for the operating costs that are explicitly listed in the operator’s annual financial statements.
• New Threshold – the 12‑month period over which GGY is calculated will now start on 1 April, rather than 1 January, creating a one‑month overlap for operators whose fiscal year does not align with the calendar year.
• Tax Relief for Responsible Gaming – operators that invest at least 3 % of their revenue into player‑protection programmes will receive a 1 % reduction in the tax rate, a concession that the government says will incentivise better industry self‑regulation.

The change will affect both domestic and international operators that hold licences to operate in the UK. According to the OBR, the majority of the additional revenue will come from online casinos and sports‑book platforms, which now account for roughly 60 % of the industry’s total GGY.

OBR’s Fiscal Impact Assessment

The OBR’s latest forecast—published in the “Fiscal Forecast for 2025/26”—shows that the tax increase will raise £2.3 billion in additional revenue by 2029‑30. The organisation notes that this figure is conservative, given that the new tax will apply to both new and existing operators, and that the growth of the online gambling sector is expected to accelerate as more consumers shift to digital platforms.

Key points from the OBR’s assessment:

• Revenue Growth – The average GGY across the industry is projected to rise by 5 % annually, implying a compounded growth of 27 % over the five‑year horizon. When multiplied by the 3 % incremental tax, this yields the £2.3 billion figure.
• Industry Impact – The OBR estimates that the tax hike will have a net negative effect on employment of 400 jobs in the gambling sector, primarily due to a reduction in capital investment and a shift in some operators’ focus to markets with lower tax rates.
• Public Service Funding – The extra revenue is earmarked for health, education and social care, with a particular emphasis on funding programs aimed at reducing gambling‑related harm, such as the National Gambling Harm Reduction Initiative.

The OBR also highlighted that the increased tax will not substantially affect consumer gambling costs. Since the tax is borne by operators, they are unlikely to pass the full cost onto players in the form of higher betting limits or reduced odds, according to an analysis conducted by the OBR’s economists.

Government Rationale and Justification

Treasury Secretary Anna Thompson, speaking at the UK Gambling Association’s annual conference, said the tax hike is “a necessary step toward creating a fairer tax system for an industry that benefits from a large national market.” She pointed out that gambling operators have historically enjoyed a “tax‑sandwich” effect, where the tax is levied only on profits, not on the volume of betting, and that the industry has a low overall tax burden compared to other sectors.

The government also linked the tax increase to a broader public‑health agenda. The Department of Health and Social Care issued a statement that the additional revenue would fund “community‑based gambling harm prevention programs and support for those at risk of addiction.” The statement noted that the UK Gambling Commission’s latest statistics show a 12 % increase in gambling‑related debt among low‑income households over the past year.

The policy is part of the Treasury’s “Fiscal Fairness Package,” which also includes a modest tax cut for small‑business operators in the hospitality and retail sectors, a move that the Treasury says will counterbalance the impact on the gambling sector and promote overall economic growth.

Industry Response

The industry’s reaction has been mixed. Online sports‑book operator BetPlay, which accounts for 18 % of the UK GGY, released a statement saying it would “carefully review its cost structure” but that it would not “unilaterally shift its entire customer base overseas.” The statement cited the potential for regulatory arbitrage in jurisdictions like Malta and the Isle of Man, where tax rates are currently lower.

Conversely, the UK Gambling Association (UKGA) expressed concern that the new tax could “push smaller operators out of the market, reduce competition and ultimately lead to higher prices for consumers.” UKGA’s chair, Dr. Sarah Lee, highlighted the sector’s current job count of 16,500 and warned that “if 400 jobs are lost, that is a significant blow to the economy.”

Despite these concerns, several operators have taken a pragmatic stance. BetPlay’s chief executive, Marco Rossi, said in an interview that the company will invest in “digital infrastructure upgrades” to increase operational efficiency and offset the tax impact. Rossi also emphasized the company’s commitment to responsible gambling, noting that it currently spends 3.5 % of its revenue on player‑protection initiatives, a figure above the threshold for the tax rebate.

International Context

The OBR report and the UK’s new tax policy come at a time when many other jurisdictions are reviewing their gambling tax regimes. In the United States, the federal government has recently introduced a “Gambling Yield Tax” proposal that would raise the corporate tax rate for operators with GGY above a certain threshold. Meanwhile, the European Union’s “Digital Gambling Directive”—still under negotiation—seeks to standardise digital gambling taxation across member states, potentially reducing the competitive advantage of the UK in the online space.

The OBR notes that the UK’s position as a global hub for online gambling is partly due to its strong regulatory framework and relatively low tax burden. The new tax hike, they say, “could jeopardise the UK’s competitive advantage, especially if other countries maintain more favourable tax regimes.”

What Comes Next

The Treasury has stated that the tax hike will be reviewed in the 2027‑28 fiscal year, with the possibility of further adjustments depending on the sector’s performance and broader economic conditions. Meanwhile, the Gambling Commission will publish a consultation paper on the implementation details of the tax, particularly regarding how operators will report GGY and how the OBR will verify compliance.

The UK government has also committed to investing an additional £150 million in gambling‑harm prevention programs over the next decade, a figure that aligns with the revenue projections from the tax increase. This investment will fund initiatives such as free gambling‑counselling services, public awareness campaigns and community‑based support groups.

Bottom Line

The UK’s decision to increase gambling taxes by 3 percentage points is a landmark move that signals the government’s intent to tighten fiscal discipline while addressing gambling‑related social issues. The OBR’s forecast of £2.3 billion in additional revenue provides the fiscal cushion needed to fund public‑service priorities, yet the move also poses risks to industry employment and competitiveness. As the sector adapts to the new tax landscape, stakeholders will be watching closely to see whether the policy achieves its twin aims of greater fiscal fairness and reduced gambling harm without undermining the UK’s status as a leading global gambling hub.