Multinational professional services firm Ernst & Young (EY) recently released a report cautioning that the U.K. government’s proposed increases to betting and gaming taxes could significantly weaken the country’s gambling sector and push more players toward unregulated markets.
Commissioned by the Betting and Gaming Council (BGC), the Impacts of Changes to Betting and Gaming Taxation report was submitted to HM Treasury ahead of the Autumn 2025 Budget next month.
The comprehensive report models multiple reform scenarios, including aligning online and retail betting taxes and raising excise duties across the board.
Projected revenue gain from U.K tax hike comes with steep economic costs
EY’s analysis found that aligning General Betting Duty (GBD) and Remote Gaming Duty (RGD) at 21 percent, up from the current 15 percent GBD rate, could deliver an additional £250 million ($333 million) in annual Treasury revenue. However, the consultancy warned that the move would also reduce the sector’s Gross Value Added (GVA) by around £240 million and cost between 2,800 and 4,700 jobs across gambling operators and their supply chains.
The report further suggested that higher duties would likely be passed on to consumers through reduced payouts and higher prices, lowering betting volumes and operator margins. EY estimates that between £400 million and £1.2 billion in wagers could shift to the black market under such a scenario.
More aggressive models proposed by policy think tanks, such as the Social Market Foundation and the Institute for Public Policy Research, were found to pose even greater economic risks. EY estimates that raising betting and online gaming duties to as high as 50 percent could wipe out up to £3 billion in economic value and cost roughly 30,000 jobs.
The study emphasized that the gambling industry currently contributes £6.8 billion annually to the U.K. economy and supports over 100,000 full-time equivalent jobs. It also noted that recent regulatory reforms are already projected to reduce online gaming revenues by £725 million by 2026.
U.K. betting firms warn of widespread closures
EY’s findings echo mounting concerns from leading betting operators. Betfred chairman Fred Done recently warned that the proposed tax hikes could force the closure of all 1,287 of the company’s U.K. betting shops, threatening 7,500 jobs.
Other major firms, including Evoke (parent company of William Hill), Flutter Entertainment, and Entain, have also flagged potential shop closures and workforce reductions if higher duties are imposed.
While acknowledging the government’s goal of increasing tax revenues, EY’s report urges policymakers to weigh fiscal ambitions against the long-term sustainability of the regulated gambling sector. Excessive taxation, it argues, risks undermining consumer protections, driving players to unlicensed operators.
The latest analysis from EY underscores a growing dilemma for U.K. policymakers regarding how to raise public revenue without destabilizing an industry that supports tens of thousands of jobs and billions in economic value.
