UK Online Casino Industry Hit by New Bonus Rules and Higher Taxes

The recent Autumn Budget produced the news that UK online casinos listed here had been fearing. Remote gaming duty will be increased from next April. It’s the latest bad news for the industry after confirmation that new bonus rules will come into place on December 19.

With the Labour government looking for ways to raise additional revenue, online gambling has long been seen as an easy target. The industry is a profitable one and there are major concerns over the levels of gambling harm that are being suffered by players. When making her Autumn Budget speech, Chancellor Rachel Reeves said that online gambling has “the highest levels of harm.”

From April 2026, remote gaming duty for online gambling sites will be increased from 21% to 40%. More bad news will follow in 2027 with the online betting duty for online sports bets (but not for horse racing) will climb from 15% to 25%.

The treasury hopes that the tax rises will raise over £1 billion a year by 2031. The funds received will help the government’s desire to reduce child poverty in the UK. Such action was called for by former Labour Prime Minister and Chancellor Gordon Brown earlier this year.

It’s the latest financial blow for the UK’s online gambling industry. 2025 has also seen a mandatory levy imposed on the industry. That has the aim of raising £1 billion a year with the monies raised being put towards the treatment of gambling harm and carrying out research into the subject. How has the gambling industry reacted to the news of the tax increases? 

Entain, who own Ladbrokes and Coral have also expressed their worries over the Budget. Their CEO, Stella David said they are “disproportionate tax increases” and will have a “detrimental impact on the economic contribution of the gambling industry.” The CEO added that they will also “put jobs at risk” and “reduce funding for sports.”

Flutter Entertainment owns sites such as Betfair, Paddy Power. Sky Betting & Gaming and PokerStars. They have warned that the tax increase will hit their profits, though reducing promotional spending, operational savings and market share gains are expected to reduce the impact on the company. Flutter has estimated that their adjusted EBITDA before mitigation will be around $320 million in the 2026 financial year and $540 million in 2027.

Their UK and Ireland chief executive is Kevin Harrington. He said the tax increases “are a very disappointing outcome and will have a significant adverse impact on our industry.” While accepting that the Chancellor sees a need to address gambling harm, he believes it is a “big win to illegal unlicensed gambling operators who will become more competitive overnight.” We’ll look at the dangers of the black market later in this article.

This month also sees changes being made to the way in which betting sites can offer bonuses to their customers. This is a subject that has been controversial for a long time and finally the UK Gambling Commission (UKGC) has announced new measures aimed at making them safer and easier to understand.

The offering of bonuses is important for gambling sites. The many advertisements that are seen and heard continually mention the offering of free bets or spins and matched deposits. It’s all part of a site trying to attract new customers in a very competitive market and then retaining their custom.

Many critics of the gambling industry oppose the offering of bonuses. They see them as a way to encourage people to gamble even if it is something that is causing them problems. It is not a case of the sites being extremely generous to their customers. Often, the offers have terms and conditions attached to them that are too complex and can confuse players.

A major problem is the wagering requirements that are in play. Players need to meet those before any bonus funds can be withdrawn from their account. Wagering requirements of say 30x make it a difficult task for players to actually be able to withdraw any funds from their accounts. This has been recognised and from December 19, there will be a cap of 10x on wagering requirements.

However, the new rules regarding bonuses and  the upcoming tax increases will only apply to those sites that have been given an operating license by the UKGC. The unlicensed and therefore unregulated black market operators will not be required to follow the new rules and they do not make any tax payments to the treasury.

The stricter levels of regulation on the licensed industry is likely to see more players opting to play on the black market. That’s not good news for the licensed companies or the players themselves due to the lower levels of customer protection on the black market. 2026 is just weeks away but it promises to be a worrying one for the UK’s online gambling industry.