UK Remote Gaming Duty at 40% in 2026: What It Means for Operators With or Without a UKGC License

Since 1 April 2026, online casino, slots and other remote gaming offered to UK customers has been taxed at 40% of profits, almost double the previous 21%. A second step follows on 1 April 2027, when online sports betting moves from 15% to a new 25% rate. The government expects the changes to raise over £1 billion a year, and they are already changing how operators price bonuses and decide whether the UK market is worth it.

This guide covers who pays Remote Gaming Duty (RGD), how it is calculated, why licensing is a separate question, and how the comparison with offshore licenses changes.

The 2026–27 UK Gambling Duty Changes

Announced at the Autumn Budget 2025 and legislated in the Finance Act 2026, the package replaced the idea of a single remote duty with split rates:

Swipe to compare →

Trade press often calls the 25% rate “Remote Betting Duty”, but technically it is a new rate inside General Betting Duty. Shop betting terminals, pool betting and spread betting stay outside it, and horse racing keeps 15% because operators already pay the 10% Horserace Betting Levy. For RGD periods straddling 1 April 2026, only profits from that date are taxed at 40%.

Who Pays Remote Gaming Duty

RGD has worked on a point-of-consumption basis since 1 December 2014. What matters is where the customer lives, not where the operator, its servers or its license are. HMRC guidance applies the duty to remote gaming offered to “a person who usually lives in the UK”, whether the provider is based in London, Malta, Gibraltar or Curaçao.

In practice, a liable operator must:

• Register online with HMRC at least 31 days before starting business, or 14 days if based in one of the territories HMRC lists.
• File a return for each accounting period, normally three calendar months, including nil returns.
• Pay the duty with the return within 30 days after the period ends (the previous working day if that falls on a weekend or bank holiday).

One detail offshore teams miss: the duty covers players anywhere in the UK, including Northern Ireland, while the Gambling Commission’s license and GGY reporting cover Great Britain only.

How the Duty Is Calculated (and Why Bonuses Matter)

RGD is charged on profits: stakes received from UK customers less winnings paid out, with losses carried forward against later periods. At 40%, every pound of margin given away matters twice as much as it did, and bonuses are where the arithmetic bites.

Since accounting periods beginning on or after 1 August 2017, freeplays are inside the duty base:

• Where a customer plays free or at a discount, the operator must in certain circumstances account for duty on what the customer would have paid without the offer.
• Freeplays handed out as prizes cannot be treated as winnings, so they do not reduce dutiable profit.

So a generous welcome package no longer shrinks the taxable figure as it once did. The Commission’s gross gambling yield (GGY) works differently: it counts a free bet or bonus only where the customer could have taken its cash equivalent instead. Your UK duty return and your regulatory return will rarely match line by line, so reconcile both.

Do You Need a UKGC License?

Yes, if you serve players in Great Britain. Since the Gambling (Licensing and Advertising) Act 2014 amended the Gambling Act 2005, any operator whose remote facilities are used by people in Britain must hold a Gambling Commission remote operating license, wherever it is established. Offering gambling to British players without one is a criminal offense, and the Commission works with payment providers and internet platforms to cut off unlicensed sites.

License and duty are separate: the Commission licenses and charges fees by GGY band; HMRC collects the duty. Neither registration covers the other. Our team handles both tracks on a UK gambling license application, from Commission policies and personal management licenses to HMRC registration.

What Operators Are Doing in Response

The largest groups have published their own estimates. Flutter expected a gross EBITDA hit of about $320 million in 2026 and $540 million in 2027, offset partly by cutting operational, promotional and marketing spend. Entain put the gross cost to its online business at around £200 million a year before mitigation, expecting to offset roughly a quarter through lower marketing and promotions, and said it expected to gain market share as smaller operators leave.

Mid-sized clients are doing the same: fewer bonuses, tighter affiliate deals and a hard look at margins. Both groups also warned that thinner offers push players towards the unlicensed market.

UK vs Offshore Licenses After the Increase

The higher duty does not create a loophole. An offshore license does not exempt you from RGD on UK players, and it does not permit you to serve Great Britain. Curaçao, Anjouan and similar regimes expect licensees to block restricted markets, and Britain is on every serious operator’s list; see our guide to Anjouan restricted countries.

The real choice is therefore between two business models:

1. Enter the UK market properly: UKGC license, HMRC registration, 40% duty on casino profits and 25% on sports betting from April 2027. This makes sense for brands with scale, strong retention and a product mix that can carry the tax.
2. Stay out of Great Britain: hold an offshore or mid-tier license, geo-block British players and focus on other markets. Our offshore gaming license comparison and the Isle of Man gambling license guide cover the main alternatives.

What clients most often get wrong is assuming they can “test” British demand under an offshore license first. They cannot: there is no grace period, and duty and enforcement exposure start with the first British customer.

Frequently Asked Questions

What is the UK Remote Gaming Duty rate in 2026?

40% of profits for accounting periods from 1 April 2026, up from 21%. Where a period straddles that date, only profits from 1 April 2026 are taxed at 40%.

When does online sports betting tax rise to 25%?

From 1 April 2027, as a new rate within General Betting Duty. Remote bets on horseracing, betting terminals in shops, pool betting and spread betting stay at their current rates.

Does Remote Gaming Duty apply to operators based outside the UK?

Yes. Since December 2014 it applies to gaming by customers who usually live in the UK, regardless of where the operator is based or licensed.

Are bonuses and free spins deductible for Remote Gaming Duty?

Generally not. Since August 2017, freeplays given as prizes cannot reduce dutiable profit, and discounted or free play can be taxed on what the customer would otherwise have paid.

Can I serve British players with a Curaçao or Anjouan license?

No. A Gambling Commission remote operating license is required for any operator whose facilities are used in Great Britain. Offshore licensees must geo-block British players.

Sources: HM Treasury and HMRC, Gambling duty changes policy paper (Budget 2025); HMRC, General Betting Duty, Pool Betting Duty and Remote Gaming Duty guidance (updated 1 April 2026); HMRC, Remote Gaming Duty: reforming the tax treatment of freeplays; Gambling Commission, regulatory returns guidance on calculating GGY; Finance Act 2014; Gambling (Licensing and Advertising) Act 2014; Flutter and Entain market statements (November 2025). Last updated: October 2026.

Disclaimer: This article is general information as of October 2026 and is not legal or tax advice. Duty liability and licensing depend on your customers, products and structure; confirm your position with a qualified adviser and HMRC before acting.