UK Budget 2026 Gambling Tax Changes: What They Mean for Players
The Budget of 28 October 2026 did not touch the headline online rates set a year earlier. It went after the high street instead: from 1 April 2027 every gaming machine with a stake above £1 or a prize above £100 pays 25% Machine Games Duty instead of 20%, and that includes the fixed-odds betting terminals in bookmakers. It also rewrites how free plays and tournament prizes are taxed for online casinos.
Most of the coverage so far is written for operators and their accountants. This page reads the same documents from the other side of the counter: which rates apply now, which apply from April 2027, and which parts can reach a player. Every rate below comes from the Treasury documents published on Budget day; the machine categories are the Gambling Commission’s. No tips, no operators named.
The short version
- New: Machine Games Duty goes from 20% to 25% on machines with a stake above £1 or a prize above £100, from 1 April 2027. Fixed-odds betting terminals (B2, £2 stake) are in that group.
- New:online casino free plays become “restricted plays” for Remote Gaming Duty, with new rules on prizes and tournaments, from 1 April 2027.
- Confirmed, not new: online sports bets (except UK horse racing) move from 15% to 25% duty on 1 April 2027; online casino duty stays at 40%.
- Unchanged for you: UK players still pay no tax on winnings. All of these duties are paid by operators.
Every gambling duty rate, now and from April 2027
The rates come from Annex A of the Budget’s overview of tax legislation and rates, which lists each gambling duty for the tax years 2026-27 and 2027-28. Betting duties are charged on what the operator keeps after paying winnings (net stake receipts), gaming duties on gross gaming profits.
| What is taxed | 2026-27 | From 1 Apr 2027 | Note |
|---|---|---|---|
| Remote Gaming Duty (online casino, slots, poker, bingo) | 40% | 40% | Rate unchanged. Free plays, prizes and tournament rules rewritten from 1 April 2027. |
| Remote fixed-odds bets, not on UK horse racing | 15% | 25% | Remote Betting Duty. Decided in 2025, confirmed in the 2026 rates table. |
| Fixed-odds bets on UK horse racing (shop or online) | 15% | 15% | General Betting Duty. No change. |
| Pool betting and tote bets on horse or dog races | 15% | 15% | No change. |
| Machines with a stake above 1 pound or a prize above 100 pounds | 20% (25% only above a 5 pound stake) | 25% | New on 28 October 2026. Takes in fixed-odds betting terminals. |
| Machines up to 1 pound stake and 100 pounds prize (not Type 1) | 20% | 20% | Pub and arcade fruit machines (Category C) stay here. |
| Lowest machines: up to 20p stake and 10 pound cash prize | 5% | 5% | No change. |
| Lottery tickets | 12% | 12% | No change. |
The background to the online figures is in our page on Remote Gaming Duty rising to 40%, and the non-tax rules that changed this year (the 10x wagering cap, slot stake limits, deposit limit rules) are collected in UK gambling rule changes in 2026.
Which machines move to 25%
Until now the 25% band only caught machines that could cost more than £5 a play. The Budget moves the line to a maximum charge above £1 or a maximum prize above £100. Laid next to the Gambling Commission’s stake and prize limits, that sends every Category B machine into the top band and leaves Category C where it is.
| Category | Where you find it | Max stake | Max prize | Duty now | From Apr 2027 |
|---|---|---|---|---|---|
| B1 | Casinos | £5 | £10,000 | 20% | 25% |
| B2 | Betting shops (fixed-odds betting terminals) | £2 | £500 | 20% | 25% |
| B3 | Betting shops, bingo halls, arcades | £2 | £500 | 20% | 25% |
| B4 | Members' clubs | £2 | £400 | 20% | 25% |
| C | Pubs, arcades, bingo halls | £1 | £100 | 20% | 20% |
What a quarter more tax means in money: on a terminal that keeps £1,000 of net takings in a month, the duty goes from £200 to £250, so the operator’s share after duty falls from £800 to £750, about 6% less. The £2 stake limit is set by regulation, so the price of a play cannot rise to compensate. The levers an operator has left are the games it offers, the number of machines and the number of shops.
Two things are still open. The Budget papers state the new thresholds but the legislation goes through the Finance Bill 2026-27 first, so the final wording may still move. Separately, a consultation running until 20 January 2027 proposes that, from 1 April 2028, machine suppliers pay the duty on machines they own and run on a profit-share basis, rather than the shop or pub that hosts them.
Free spins and “restricted plays”: what changes online
The second change is narrower and more technical. From 1 April 2027 the Remote Gaming Duty rules on free plays are rewritten: free plays are renamed restricted plays, restricted plays won by using another restricted play are left out of the duty calculation, the test for when a tournament counts as a game of chance is amended, and the definition of a prize is revised to cover prizes paid under a game’s rules and certain payments after a game is interrupted or ended.
What the documents do not say is just as important: they do not say whether the cost of free spins or bonus funds becomes more or less deductible for an operator, and the Treasury describes the measure as putting the tax treatment “beyond doubt”. Anyone telling you that free spins will disappear in April 2027 because of this Budget is reading more into it than the text allows. The rules that actually limit bonuses today are regulatory, not fiscal: the 10x cap on wagering requirements in force since 19 January 2026, explained in our guide to understanding wagering requirements.
Timeline
- 1 April 2026— Remote Gaming Duty 21% to 40% (in force).
- 28 October 2026— Budget: machine duty thresholds, restricted plays, Gaming Duty bands frozen for 2027-28, consultation on supplier liability opened.
- 20 January 2027— consultation on supplier liability for Machine Games Duty closes.
- 1 April 2027— Remote Betting Duty 25% on online sports bets (not UK horse racing); Machine Games Duty 25% above £1 stake or £100 prize; restricted plays rules for online casinos.
- 1 April 2028— proposed start of supplier liability for profit-share machines.
Regulatory dates that sit alongside these (deposit limits, financial risk checks, the Commission’s leadership) are tracked on our UK gambling regulation tracker.
Frequently asked questions
What did the 28 October 2026 Budget change for gambling?
Two measures take effect on 1 April 2027. Machine Games Duty rises from 20% to 25% on any machine with a maximum charge to play above 1 pound or a maximum prize above 100 pounds, which brings fixed-odds betting terminals and the other Category B machines into the top band. Remote Gaming Duty keeps its 40% rate, but the rules on free plays (renamed restricted plays), prizes and tournaments are rewritten. The Budget also freezes the Gaming Duty bands for land-based casinos for 2027-28 and opens a consultation, closing on 20 January 2027, on making machine suppliers liable for duty from April 2028.
Did the Budget raise the tax on online casinos again?
No. Remote Gaming Duty went from 21% to 40% on 1 April 2026, a decision taken in the November 2025 Budget. The rates table published with the 2026 Budget lists 40% for both 2026-27 and 2027-28. What changes from April 2027 is the definition of what is taxed, not the rate.
Is the new 25% tax on online sports betting still going ahead?
Yes. The rates table published on 28 October 2026 shows Remote Betting Duty on remote fixed-odds bets at 15% for 2026-27 and 25% for 2027-28, so the increase announced in 2025 starts on 1 April 2027. Bets on UK horse racing stay at 15%, online or in a shop, and pool betting stays at 15%.
Do I pay tax on my gambling winnings in the UK?
No. Every duty in this Budget is charged on the operator, calculated on what the operator keeps after paying out winnings. A UK player does not declare or pay income tax on betting or casino winnings. The tax can still reach players indirectly, through the odds, the size of bonuses and the number of shops and machines operators decide to keep.
Sources
Read on 29 October 2026. Rates and effective dates are the Treasury’s Budget 2026 publications of 28 October 2026; machine stake and prize limits are the Gambling Commission’s published categories. The match between the two (which category lands in which band) and the worked example are our own reading.
- HM Treasury, Budget 2026: Overview of tax legislation and rates (paragraphs 1.50, 1.51, 2.19, 2.29) — gov.uk
- HM Treasury, Budget 2026: Annex A, rates and allowances (gambling duties) — gov.uk
- HMRC, Excise Duty: Gambling Duty rates (2026-27) — gov.uk
- Gambling Commission, Gaming machine categories — gamblingcommission.gov.uk
18+. A tax change on the operator does not alter the odds of the game in front of you. If you play machines or online games, set a limit before you start rather than during a session. Deposit limits, time-outs and support are on our responsible gambling page.