OBR Data Suggests New Tax Measures May Redirect Player Spending

A recent review of the UK gambling tax framework has raised major questions about how consumers may respond once the higher duty rates apply. Early indicators show that regulated operators could face pressure as customers adjust to increased prices and reduced payouts.

Good to Know

• OBR expects most duty increases to be passed along to customers.
• Analysts predict shifting activity from licensed betting to unregulated operators.
• Industry groups warn of long-term economic risks and reduced competitiveness.

Concerns from economists and industry representatives have emerged after the Office for Budget Responsibility completed its assessment of the new betting and gaming tax rates. Rather than driving higher public revenue, the revised structure may produce contrasting outcomes, as customers look for alternatives outside licensed channels.

According to the OBR analysis, around 90 percent of the added tax burden is likely to reach the consumer directly. Higher prices and lower payouts reduce the appeal of regulated products, which creates an environment where offshore or illegal operators become more tempting due to fewer restrictions and higher returns. As a result, the OBR projects that the tax changes may lower the Government expected yield by nearly one-third by 2029–30, including a projected £500 million decline.

The Government still forecasts £1.1 billion in added revenue under the new system. Industry bodies, however, question that assumption. The Betting and Gaming Council, alongside independent consultants such as EY, has highlighted differences between the Treasury outlook and the behavioural modelling used in the OBR assessment.

BGC Chief Executive Grainne Hurst outlined the concern with direct language. She said:

“The Government own figures show these tax plans will cause significant damage.”

She added:

“Industry analysis based on modelling from EY finds that nearly 17,000 high-tech jobs will be lost across online betting and gaming, with over £6 billion in stakes diverted to the black market – a 140 percent increase in its size.”

Hurst also said:

“These proposals also threaten shop closures, further job losses and a less competitive online market, meaning lower, not higher, long-term tax revenue. They also push more customers to the black market, where there are no protections, no taxes and no safeguards.”

The regulated betting sector contributes £6.8 billion to the UK economy and supports more than 109,000 jobs. Around £4 billion in tax revenue flows into national and regional funding streams, including racing, tourism and sport. Industry representatives warn that rising duty levels may create instability for licensed operators while unregulated sites face no such cost pressure.

For that reason, the BGC is urging HM Treasury to consult more closely with the sector before the updated structure causes long-term damage. The council argues that collaboration is needed to limit unintended effects, preserve jobs and maintain a functioning regulated market.

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