The UK government has officially confirmed that the new remote gaming duty (RGD) rate of 40% will take effect on April 1, 2026. This significant tax hike, first proposed in the 2023 White Paper, is part of a broader fiscal tightening aimed at funding enhanced player protection measures and combating the illegal gambling market. The announcement comes alongside a 30% increase in annual licence fees for operators, set to begin in October 2026. Industry analysts at Grand View Research project that the combined effect of the duty rise and stricter affordability checks could reduce operator valuations by 10-20% for the most exposed players.
Key Impact:
- Margins Under Pressure: Online operators, particularly those with high UK exposure like Entain and Flutter, face a material hit to profitability. Estimates suggest affordability checks alone will carve out around £181 million annually from gross gambling yield.
- Compliance Cost Surge: The GOV.UK consultation documents highlight that advertising restrictions and stake limits are inflating operating costs by 20-30% in the current environment.
- Investor Response: Private equity is reportedly flowing towards efficiency plays and responsible gaming technology, which can deliver margin improvements of 5-10% to offset the tax burden.
