Online casinos in Great Britain will soon see a near doubling of their taxes owed on the gambler losses they rake in.
Online gambling can cause severe harm, including being a major factor in suicide in some cases. In Great Britain, 1.4 million people are problem gamblers, with a further 1.6 million at risk.
A new tax announced Nov. 26, 2025, will raise the tax rate on online slots and table games from 21% to 40%, starting April 2026.
Operator taxes on online sports betting will increase from 15% to 25% starting April 2027. Bets placed via self-service betting terminals on licensed betting premises will not be affected.
The changes come from a new budget announced by the U.K. Chancellor, Rachel Reeves.
Online Casinos Are the Primary Focus
Casino games played online were the main target in addressing gambling addiction. According to GambleAware, 5.3 million Brits want to quit or reduce their gambling. That’s nearly one-fifth of the British adults who engage in gambling.
The Guardian reported that Meg Hillier, chair of the House of Commons Treasury Committee, recently summed up the motivation behind the tax increases:
“Some parts of the gambling industry, such as racecourses and bingo halls, make a cultural contribution to our country,” she said. “This is not the case, though, for online slots and other remote gaming, which can quickly drain the bank balances of vulnerable people after just a few clicks of a button on a phone.”
According to a policy objective explanation on the U.K.’s official government website:
“Increasing gambling duties will raise over £1 billion per year to support the public finances and form part of our ambition to create a fair, modern and sustainable tax system.
“The government has targeted the biggest increase in tax on remote gaming (for example online slots and casino games), which is generally considered to have lower operating costs and to be more harmful than other forms of gambling. The intention of the Remote Gaming Duty rate increase is to disincentivise gambling companies from pushing consumers towards what are considered more harmful products.”
The new gambling taxes are separate from a statutory gambling levy designed to combat gambling harm announced in August 2025. However, politically they both represent a growing pushback against out-of-control online gambling.
Impact on Gambling Operators
The British government said that gambling firms could pass on the tax increase “through a negative change in betting odds or return to player” percentages.
“In response, some individuals could choose to gamble less, switch to alternative gambling activities or gamble through the illegal gambling market,” the government said.
The tax changes are expected to affect around 160 “remote betting” businesses.
“These increases will impact on the revenue of gaming and betting companies,” the government said. “How they respond will be a matter for these businesses.”
The Guardian reported that smaller online gambling businesses could take the brunt of the impact. This could allow online gambling giants to consolidate market share.
In GamblingHarm.org’s analysis, operators may offer smaller so-called “welcome bonuses” and cut back on “free bets.”
Industry Condemns the Tax Increases
Betting and Gaming Council CEO, Grainne Hurst, said in a statement:
“Massive tax increases for online betting and gaming announced in the Budget make them among the highest in the world, and are a devastating hammer blow to tens of thousands of people working in the industry across the U.K., and millions of customers who enjoy a bet.
“Regulated betting and gaming is one of the U.K.’s few globally successful sectors, generating £6.8bn for the economy, contributing over £4bn in tax and supporting 109,000 jobs, while delivering vital funding for British sport.
“While we welcome the decision not to raise land-based duties and to scrap bingo duty – these excessive online tax increases will undermine jobs, investment and growth across the U.K.
“The Government’s Budget is a massive win for the incredibly harmful, unsafe, unregulated gambling black market, which pays no tax and offers none of the protections that exist in the regulated sector.”
Hurst was recently part of a contentious hearing on the social harms associated with gambling.
British Online Casino Tax Compared to U.S.
In the U.S., just seven states have legal online casino gambling. The 40% online casino operator tax rate in the U.K. is higher than in most U.S. states.
Here’s a look at the online casino tax rates in the U.S.
- New Jersey – 19.75%
- Pennsylvania – 54% on online slots; 16% on online table games & poker
- Michigan – 20–28%
- West Virginia – 15%
- Delaware – 57% on online slots; 20% on online table games
- Connecticut – 18% (rising to 20% in 2026)
- Rhode Island – 62.45% on online slots; 16.5% on online table games
In Pennsylvania, which has a significantly higher tax rate on online slots than what is coming in the U.K., the online casino gambling market continues to grow rapidly.
In October 2025, Pennsylvania online casino gambling generated monthly revenue totaling $251 million. That was up 32.8% compared to $189 million in October 2024. Revenue for both online slot machines and online table games reached all-time monthly highs for the Keystone State.
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