We will forever remember 2025 as the year when everything changed for the better because, right now, the UK government has unveiled a proposal that could fundamentally reshape how gambling operators pay tax. It is one of the world's most mature betting markets, and the authorities are looking to introduce the Remote Betting & Gaming Duty (RBGD), aiming to consolidate and modernise the existing tax framework for remote gambling activities. The proposal has sparked significant debate across bodies, stakeholders and public health advocates, so let's dive in.
Explaining RBGD
The proposed RBGD is a single, unified tax rate that would replace the current fragmented duty regime applied to remote betting and gaming. Just so you have an idea of how the current situation looks, in the present day, operators have to obey the following tax scheme:
- 15% Remote Gaming Duty (RGD) on profits from online casino-style games.
- 21% General Betting Duty (GBD) on online fixed-odds betting.
- 3% Pool Betting Duty (PBD) for pool-style or parimutuel bets.
In case you didn't know, parimutuel bets are those bets you would place in a system in which all wagers of the same particular type are placed together in a single pool. After tax deduction and house-take, the total win is split between the winners. You would see this system being used in horse racing or some lottery games.
The new duty would consolidate these rates into one uniform rate, applying to all remote gambling activities, regardless of format.
Government's Justifications: Simplification and Modernisation
In the official Government Closed Consultation from May 6th, the UK Treasury has presented the RBGD as part of its broader effort to modernise the tax system and make it more reflective of how consumers actually gamble in 2025. The shift toward a single duty is designed to simplify the compliance burden for operators with multi-product portfolios.
At the same time, its aim is to reduce opportunities for tax arbitrage between gaming and betting segments. Companies would find little escapes and avoid certain taxes by declaring different incomes in different betting or gaming sectors. I want to clarify that this will not affect the casual consumer and has nothing to do with arbitrage betting, which is what an individual gambler would choose to do or not.
Lastly, another purpose is to level the playing field between operators offering different types of games. Officials argue that the current system is outdated, confusing, and prone to inefficiencies. To avoid any complicated terminology here, what the officials are trying to do is to streamline duties under a single heading.
This way, The Treasury hopes to create a more transparent and predictable tax environment. If they succeed, this will most likely benefit the final consumer, since official certified and licenced operators would have more responsibilities and would be forced to be more transparent regarding their taxes.
Pushback From Operators
We are not surprised to see that a simplification may sound good and beneficial on paper, but operators only criticised the RBGD from various angles. Based on their online declarations and speculations, the new taxation model would have an impact on several levels, such as:
- Potential Effective Tax Increase: One of the primary concerns is that the new unified duty could increase the effective tax burden on certain industry segments. For example, fixed-odds betting currently enjoys a lower rate (21%) compared to the proposed RBGD range rumoured to be 25% or even 30%. According to several online publications, operators believe this will directly affect sports betting margins, especially for firms already facing rising compliance and player protection costs.
- Impact on UK Horse Racing: The horse racing sector is especially concerned because a rise in operator tax may lead to a reduction in levy contributions and sponsorship deals. Racing bodies warn that if betting operators pass costs onto consumers or scale back investment, the ripple effects could damage the ecosystem that sustains the actual sport.
- Operational Concerns from Smaller Operators: Smaller iGaming firms have voiced concerns about the lack of tiered implementation. They argue that a flat rate across all companies would disproportionately harm low-margin operators, reducing competition and consolidating market power in the hands of large tenants.
Can the RBGD Simplify Things?
If you are objectively looking at the new tax format, there are some questions that everyone is waiting to receive an answer to:
- Will this discrepancy between different products be removed entirely from tax rules?
- Will the duty apply uniformly to all operator revenues, or will certain formats have to obey a different set of regulations?
- How will the new duty interact with international tax frameworks and white-label partners?
Concluding
Everything is still up for debate, and I invite you to do your own research and read as much as you can on the topic. Many in the industry remain sceptical that simplification will be achieved without unintended side effects.
