Why the UK's Remote Gaming Tax Hike Could Backfire Badly

Dr. Annelies De Vos · 2026-07-16

The United Kingdom recently announced a significant increase in Remote Gaming Duty (RGD), pushing it to 40% starting in April 2026. This move has raised serious concerns among industry insiders and analysts, who warn it might drive more gamblers toward unregulated offshore operators. Let's break down what this means and why it matters. ### The Tax Hike and Its Immediate Impact Under the new policy, the RGD will jump to 40% in April 2026, with another increase scheduled for April 2027. That's a steep climb from current levels, and it's already causing ripples. Research from H2 Gambling Capital shows that the combination of higher taxes and lower return-to-player (RTP) rates on licensed UK sites is pushing players to look elsewhere. Think about it this way: when you're paying more to play and getting less back in winnings, it's only natural to search for better options. Offshore operators, which aren't subject to UK taxes, can offer higher RTP rates and more attractive bonuses. That's a dangerous temptation. - The tax increase reduces the amount operators can return to players as winnings - Lower RTP rates make licensed sites less competitive - Offshore sites operate outside UK regulations, posing risks to consumers ### Why This Matters for the Industry The Betting and Gaming Council (BGC) has been vocal about the potential consequences. They argue that pushing players toward unregulated markets doesn't just hurt licensed operators—it also undermines consumer protection. When you gamble on an offshore site, you lose the safeguards that come with UK licensing, like dispute resolution, responsible gambling tools, and data security. "This isn't just about tax revenue," one analyst noted. "It's about keeping the market safe and sustainable. If players move offshore, everyone loses." ### The Domino Effect on Onshore Operators Licensed operators in the UK are already feeling the pressure. With margins squeezed by higher taxes and lower RTP rates, they're struggling to compete. Some may be forced to cut costs, reduce marketing, or even exit the market entirely. That could lead to fewer jobs, less innovation, and a less diverse gambling landscape. On the flip side, offshore operators are thriving. They don't have to worry about UK regulations or taxes, so they can offer better deals. But there's a catch: these sites often lack proper oversight, which means players might face issues like delayed payments, unfair terms, or even fraud. ### What This Means for US Professionals If you're working in the US gambling industry, this UK situation offers some valuable lessons. It shows how tax policy can have unintended consequences, especially when it comes to illegal gambling. The US market is different, but similar dynamics could play out if states push taxes too high. - Keep an eye on offshore competition in your market - Advocate for balanced tax policies that don't drive players underground - Focus on consumer protection as a selling point for licensed operators ### The Bigger Picture This isn't just a UK problem—it's a global issue. As more countries consider raising taxes on gambling, they'll need to weigh the short-term revenue gains against the long-term risks. If players move offshore, governments lose tax revenue anyway, and consumers face greater risks. For now, the UK is heading into uncharted territory. The next few years will show whether this tax hike achieves its goals or backfires spectacularly. One thing's for sure: the gambling industry will be watching closely.