28 November 2025

H2 Analysis of UK Online Tax Increase Leads to Onshore Channelisation Falling to 84%

Following announcements made during the UK Budget, UK remote gaming duty (RGD) will almost double to 40% of GGR (from 21%) as of April 2026, and remote sports betting duty will increase from 15% to 25% of GGR from April 2027 (although remote horse race betting duty will remain at 15% of GGR).

A number of operators have released statements regarding the impact of this on profitability, with various estimates of mitigation, but the lion’s share of cost cutting will come from lower bonusing (tax is paid on GGR including bonuses / free bets, rather than the GGY reported by the UKGC) and a reduction in marketing spend.

In our in-depth report, H2 has conducted analysis on the impact of these taxes, making a number of assumptions over the change to bonusing levels, reductions in underlying post-bonus GGY, and the shift of a portion of this to offshore operators. Below, we walk through this analysis on a step by step basis, and compare our conclusions to the official estimates released by the Office of Budget Responsibility (OBR) which is the body that gives “independent and authoritative analysis of the UK’s public finances”.

 

The key conclusions are:

• Direct tax generation from RGD and betting duty will increase by c.£800m, only half of the £1.6bn ‘static’ benefit of the increased tax rate, due to adverse behavioural change

• Onshore channelisation falls to 84% as a portion of reduced onshore spend shifts to illegal operators – with iGaming onshore channelisation falling to 80%, as the illegal market doubles in size

 

Click Here to Download H2's Full Report on the Impact of the Changes