Remote gaming providers in the UK are liable to account for Remote Gaming Duty (RGD), which applies to gaming over the internet, telephone, television, radio, or any other electronic communications or other technology for facilitating communication.

Finance Bill 2025-26, now amending section 155(3) of Finance Act 2014, has effectively amended the Remote Gaming Duty rate to reflect an increase from 21% to 40% and adds new sections to Part 3, Chapter 1 of Finance Act 2014 to introduce the new remote betting duty rate of 25%. Furthermore, it repeals Bingo Duty - this will encompass all relevant provisions relating to Bingo Duty, including sections 17 to 20C and Schedule 3 of the Betting and Gaming Duties Act 1981.

The remote rate of 25% will now apply to all remote betting other than remote bets on UK horse-racing which will remain unchanged, in line with land-based betting, in recognition that operators contribute 10% towards the statutory Horserace Betting Levy, resulting in an existing de facto 25% rate for bets on UK horse races.

Bets placed via self-service betting terminals on licenced betting premises will not be treated as being placed remotely and will remain subject to the 15% rate for general bets. It goes without saying that the near-doubling of the tax rate materially reduces net margins for British casino-heavy operators. This is one of the largest tax changes in the UK gambling sector in years and part of a broader package of duty reforms announced in the Autumn Budget 2025.

RGD is a tax levied by HMRC on gross gambling profits (stakes/participation fees minus winnings or prizes paid out) from remote gaming provided to UK customers. It applies to online, telephone, TV, or other electronic channels. The new 40% rate applies to accounting periods beginning on or after 1 April and is charged on profits arising from that date (with pro-rating for straddling periods).

This is not a flat tax on stakes or revenue - it is on the operator's net win after payouts. RGD is thus a profits-based tax (GGR = stakes minus winnings/payouts), not a turnover/stakes tax. Many observers ask, why did the British government make this drastic move? The three reasons cited by the UK governments are: 1) a heavy shift to remote gambling: Remote GGY has grown >60% since 2015/16 while land-based has declined >10%. Remote activity now accounts for ~60% of total UK gambling yield. It notes that remote gaming (especially slots/casino) has lower operating costs than betting or land-based operations and is linked to higher problem gambling rates, for example online slots have significantly higher PGSI scores. Hence, the government is seeking higher taxes.

Another major justification for such high taxes is the dire state of public finances. The package is expected to raise over £1 billion per year extra, helping to fund public services. This measure will impact individuals if the duty rate increase is passed on to them through a negative change in betting odds or return to player.

In response, some individuals could choose to gamble less, switch to alternative gambling activities or gamble through the illegal gambling market. The explicit policy goal is to disincentivise operators from promoting more harmful products while asking a fast-growing, low-overhead sector to contribute more. Land-based and lower-risk activities (such as bingo, horse-racing) were largely protected.

There has been some repositioning (for example Sky Bet reportedly relocating HQ to Malta for higher efficiency. As yet, no significant market exits are evident from the UK as of mid-April, but the sector is clearly in adjustment mode.

Here is how the new UK 40% RGD compares with other notable jurisdictions (as of 2026; rates can include base tax plus levies and may vary by operator size or product. To start with The Netherlands: 37.8% (rising from 34.2% in 2025); Austria: charges around 40% on iGaming (matches the new UK rate); Denmark: 45-75% on online casino GGR in some structures (high effective burden) but a smaller market with state-influenced elements); Germany: brandishes a complex structure - often includes a 5.3% turnover (stakes) tax on slots/poker plus other levies; so, its effective GGR burden can be very high in practice, sometimes cited as among the world's toughest; Sweden: 22% (increased from 18% in recent years; Italy: 25.5% on online casino/bingo/poker and Spain: typically 20-25% range. Malta's effective rate can be as low as ~5% (vs UK's 25%) while by comparison Gibraltar offers a competitive regime but is now under pressure to upgrade.

The recent UK duty hike is expected to lead to lower consumer demand overall (some players gamble less, switch activities, or stop). Yet, many fear there will also be a risk of migration to the unregulated/illegal market, which the government is countering with extra Gambling Commission enforcement funding.

Industry groups argue these duty changes threaten jobs, sponsorship, and growth. The government counters that it deliberately shielded the high-street/retail sector (which supports more employment) and focused the biggest increase on remote gaming. Proponents of high duty welcome this as a harm reduction measure, thus rendering harmful products less profitable to promote. They argue that the policy aims to reduce problem gambling and related societal costs.

Naturally, the industry is warning of a slow migration by larger outfits to move physically out of the UK to offshore or to unlicensed sites, increasing harm rather than reducing them.

The UK rate now exceeds or matches the highest in large European markets and stands out as the highest among major regulated jurisdictions for online casino specifically. Many offshore licensing hubs (example Malta, Gibraltar, Isle of Man) have much lower effective rates (often 0-5% corporate tax plus modest gaming duties or contributions), but operators targeting the UK must still pay the full UK RGD on UK-sourced profits regardless of where they are licensed.

Malta may become one of the emerging winners. It offers lower taxes and an established MGA framework which is attracting relocations and shared-service functions. It benefits from operators already holding dual license.

Typically, the giant operator Flutter had relocated its Sky Bet's headquarters to Malta through a new entity (SBG Sports Limited). Will there be others?

George M. Mangion is a senior partner at PKF Malta