The 40% Remote Gaming Duty: who actually pays the UK’s new online games tax

Online casino operators write the cheque for Remote Gaming Duty, which nearly doubled from 21% to 40% on 1 April 2026. The Office for Budget Responsibility expects them to recover around 90% of that cost from players through lower payouts and thinner promotions. For players comparing what different platforms still offer, an online gambling guide from gamerules.com can help identify the best online casinos by examining factors such as licensing, payment methods, bonuses and game selection. The Treasury, in other words, has already budgeted for the tax reaching the customer.

That assumption sits in the government’s own paperwork rather than in industry lobbying, which makes it the most useful starting point for anyone trying to work out where £1 billion a year is coming from.

What Remote Gaming Duty is and what changed in April

Remote Gaming Duty is charged on operators’ gross gambling profits from online games of chance, meaning stakes received minus winnings paid out. It covers online slots, roulette, blackjack, live dealer tables and online bingo. It is not a tax on turnover, so a site that takes £100 in stakes and pays out £96 owes duty on the £4 it kept.

The new 40% rate applies to accounting periods beginning on or after 1 April 2026, under section 86 of the Finance Act 2026. Bingo Duty, previously 10% on in-person bingo, was abolished on the same date. A separate 25% rate for online sports betting follows in April 2027, with remote bets on UK horseracing staying at 15%.

The duty follows the customer rather than the company. Rachel Reeves made that point when the Treasury Committee asked whether operators could simply move offshore, telling MPs the tax applies to the bet regardless of where the business sits. Relocating to Malta or Gibraltar does not avoid it on play by people who usually live in the UK.

Who actually pays the 40%

HMRC answered this in the impact note published alongside the Budget on 26 November 2025. The department wrote that the measure will affect individuals if the increase is passed on to them through a negative change in betting odds or return to player, and that some people could respond by gambling less, switching products or moving to the illegal market.

The OBR put a number on it. Its November 2025 Economic and Fiscal Outlook estimated that operators would seek to pass through around 90% of the duty increase by raising prices or reducing payouts, and that the resulting drop in demand would cut the yield by £0.5 billion by 2029/30. Behavioural responses were expected to reduce the total take by roughly a third.

So the forecast that underpins the policy assumes the cost lands on players, and assumes some of those players stop playing as a result. HMRC’s line on how firms would respond was blunt: that is a matter for the businesses.

How a tax on profits reaches the player

The main mechanism is return to player, the percentage of stakes a game pays back over millions of spins. Suppliers now ship the same slot in several configurations, typically 96%, 94% and 92%, and the operator chooses which version to run. Nothing about the game looks different to the customer.

Helen Walton, co-founder of G Games, told iGaming Business in April 2026 that standard UK settings had moved from around 96% to 94%, with 92% now the maximum operators request. She has argued that a four-point cut shortens play time and reduces how often bonus features appear, which changes what the product is worth as entertainment.

The arithmetic is starker than the percentages suggest. At 96% RTP, every £1 wagered costs the player 4p on average. At 92%, it costs 8p. Eyal Loz of game developer RubyPlay has made the point that this is not a four per cent change but a doubling of the price. IBTimes UK published a comparative analysis on 23 April 2026 finding that several UK operators had reduced RTP settings since the duty rose.

Players rarely read paytables, so the effect shows up as a feeling rather than a figure. Deposits run out faster, sessions end earlier, wins arrive less often.

What has happened to bonuses, marketing and jobs

The second lever is promotional spend, and the numbers operators gave investors were specific. Entain, which owns Ladbrokes and Coral, estimated around £200 million in extra annual cost for its UK and Ireland business and said it would mitigate about a quarter of that by cutting marketing and promotions, leaving an EBITDA impact of roughly £100 million in 2026. Flutter, whose brands include Sky Bet and Paddy Power, forecast a $320 million hit in 2026 falling to $235 million after mitigation. Evoke, the owner of William Hill, put the extra duty at £125 million to £135 million a year and aimed to offset around half.

Research published by the Betting and Gaming Council in early 2026 found the major groups indicating advertising reductions of about 20%. Entain confirmed in July 2026 that it was cutting 500 roles, close to 2% of its workforce, though it described the move as an efficiency programme rather than a direct response to the tax.

Bonuses were already shrinking for a separate reason. Since 19 January 2026, UK operators have been banned from offering mixed-product promotions and capped at wagering requirements of ten times the bonus amount. The tax arrived eleven weeks later, into a market that had just lost its most flexible promotional tools.

Does the tax push players to unlicensed sites?

This is where the evidence splits, and where the source of the evidence matters. H2 Gambling Capital, whose analysis has been promoted by the Betting and Gaming Council, estimates that the share of UK online gambling going through licensed operators fell from 97% in 2019 to about 92% in 2025, and forecasts 85% by 2031. It puts offshore turnover at £16.6 billion in 2026, up from around £5 billion in 2019.

Consultancy Regulus Partners points to Germany as the warning. A 5.3% turnover tax there pushed slot RTPs down to around 90%, and the licensed slots market shrank from roughly €800 million in annual revenue in 2022 to about €470 million in the second half of 2025, while the unlicensed market grew to an estimated €2 billion.

Independent economists are less alarmed. A study by the National Institute of Economic and Social Research with the University of Glasgow, published in May 2026, modelled an £812 million reduction in gross gambling yield and found only about £134 million of it would translate into a net loss to UK GDP, rising to roughly £189 million if 8% of the freed spending went to unlicensed operators. Most of the money, the researchers found, would be redirected to food, household goods, savings and debt repayment. Of the online gamblers surveyed, 73% said they would not move to unlicensed sites.

The government’s own estimate, given by Economic Secretary Lucy Rigby during the Finance Bill debate in January 2026, is that the illegal market represents between 2% and 9% of legal online stakes. Ministers added £26 million of funding for the Gambling Commission over three years to police it.

What it means in Yorkshire

Leeds has more at stake than most cities. Sky Bet, now part of Flutter, has its headquarters at Wellington Place, and the company said in 2024 that more than 1,500 people worked there, with close to 5,000 across its UK and Ireland business. Marketing and promotional budgets are the first thing to be cut when duty rises, and those are the budgets that pay for teams.

The wider trend predates the Budget. Rigby told the Commons that employment across the gambling industry fell by around 20% between 2015 and 2023, and that the reforms were aimed at online operations precisely because betting shops and casinos carry higher costs and more staff.

Will the Treasury collect its £1 billion?

The certified forecast is £810 million in 2026/27, rising to £1.16 billion by 2030/31, and those figures are already net of the behavioural discount. H2 Gambling Capital has argued the real yield could come in near half the static estimate once players reduce spending or move offshore, though its modelling starts from industry assumptions.

HMRC has said it will consider evaluating the policy after two years of monitoring data. That puts the first honest verdict somewhere in 2028, which is a long time to wait for an answer that players are already paying for one spin at a time.

Have you noticed your money going less far on licensed sites since April, or has nothing changed for you?