Raising the Stakes: UK Government Consults on the Tax Treatment of Remote Gaming and Gambling

On 28 April 2025, the U.K. government launched a consultation (Consultation) which could result in significant changes to the tax regime applicable to U.K.-facing remote gaming and gambling. 

The Consultation notes that “Gambling has increasingly shifted online, with Gross Gambling Yield (GGY) for remote gambling now at £6.9 billion per year, having seen over 60% growth since 2015/16 and 30% growth in the last 5 years.” The Consultation also notes that gambling (online and in person) raises approximately £3.4 billion to the Exchequer each year in excise duties. The stated aims of the Consultation are “tax simplification and modernisation”; as addressed below, we are sceptical.

The Consultation proposes that a new, single Remote Betting & Gaming Duty (RBGD) will be introduced to replace three separate duties which currently apply to different forms of remote gaming and gambling. At present, the taxes which apply to remote gaming and gambling in the U.K. are: (i) the General Betting Duty (GBD); (ii) the Pool Betting Duty (PBD); and (iii) the Remote Gaming Duty (RGD). It is said in the Consultation that the RBGD would be a streamlined duty which would cover all forms or remote gaming and gambling, replacing the GBD, PBD and RGD. The U.K. government’s view is that in introducing the RBGD, businesses would benefit from a harmonised approach to taxation.

The last major government reforms in this area were in 2014 (under the Finance Act 2014). The Finance Act 2014 introduced the “place of consumption” reform to require providers of gambling, regardless of where they are based, to pay U.K. gambling duties on gambling by U.K. customers (the PoC Reforms). PoC Reforms were a very controversial measure; the legality of which was the subject of a Judicial Review challenge (R. (on the application of Gibraltar Betting and Gaming Association Ltd) v Revenue and Customs Commissioners). One of the questions arising in that case was whether the PoC Reforms were contrary to the freedom to provide services under the Treaty on the Functioning of the European Union (TFEU) art.56.

These various duties have given rise to a significant volume of tax litigation over the years. A recent example was Broadway Gaming Ltd v Revenue and Customs Commissioners [2022] UKFTT 00120 (TC). That case involved so called “free plays” and questions as to what was deductible expenditure for the purposes of computing the RGD liability. 

With the significant rise in online gaming and gambling (as noted above, 60% growth since 2015/16), we expect to see a further increase in the number of HMRC investigations and disputes concerning online gaming and gambling duties. Harmonisation of GBD, PBD and RGD (to RBGD) will also no doubt give rise to uncertainty and, consequently, disputes. 

Notable features of the Consultation

• The RBGD would include the existing definitions in s.154 of the Finance Act 2014 and s.4 of the Gambling Act 2005 to comprehensively cover activities based on the use any electronic communication. The Consultation proposes that ancillary remote gambling activities such as betting through self-service betting terminals are brought within scope of the RBGD.
• Spread betting will potentially be included in the RBGD, as the U.K. government’s understanding is that spread betting is predominantly a remote activity. However, possible alternative treatments may be explored.
• A key proposal in the Consultation relates to the treatment of the re-wagering exemption under the RGD, as the U.K. government believe that this is being exploited. 

At what rate?

The Consultation does not propose a rate for the RBGD, instead stating that it would be set as part of the budget process. It is therefore unclear how the tax burden would change for the online gaming and gambling industry.

The Consultation notes:

“…there are currently different duty rates for RGD, GBD and PBD. The government proposes that the new RBGD would harmonise these to a single rate. However, it is beyond the scope of this consultation to determine what that specific rate ought to be.”

As noted in the Consultation, the current rates for GBD, PBD and RGD are indeed varied. For example, GBD is due at 15% of gross profits, 10% for sports spread bets and 3% for financial spread bets, whereas RGD is due at 21% of gross profit. The implicit suggestion is that this is an opportunity for the cash-strapped U.K. government to seek to raise further revenue by adopting a higher uniform rate of tax. 

Next steps

The Consultation closes on 21 July 2025. Subject to businesses’ feedback, the U.K. government would look to bring the new tax into effect in October 2027 or thereafter.

Brown Rudnick is well placed to assist online gaming and gambling businesses should they want assistance responding to this Consultation. Further, our UK Tax Controversy team is also well placed to assist with any litigation matters (including of the type described above) relating to the RGD, GBD, PBD and indeed the newly proposed RBGD.