Taxing Times: Why UK Online Casinos Are Changing

The Labour government’s recent tax raid has hit the online casino industry in the UK, doubling Remote Gaming Duty. Comparasino Co-founder Martyn Hannah looks at what changes are coming, how online casinos will respond and what it means for you, the player. 

Online casinos in the UK are changing, and it’s Chancellor Rachel Reeves’ fault. Why?

Because as part of a package of tax increases, the Labour government set its sights on the online casino industry, imposing a significant increase in Remote Gaming Duty (RGD) from April 2026. 

Remote Gaming Duty is just one of many taxes that online casino operators pay in the UK, and is applied to the gambling revenue that passes through the online casino, minus player payouts, not the profit that it makes – more on this below. 

The increase is significant, jumping from 21% to 40%. The government said it has done this to raise additional revenues and to help to address the “harm” that can occur when playing online slots and casino games – although quite how increasing taxes does that is a little beyond me. 

Remote Gaming Duty has been increased to 40% by the Labour government

The tax has increased by such a significant amount that operators must now look at ways of mitigating it, and this unfortunately will have an impact on the experience you receive – albeit a minimal one. 

To be clear, UKGC licensed online casinos are not doing this to make more money, they are doing it to survive – the tax increase will force many brands out of the market as it’s simply no longer viable for them to accept players from the UK. 

Before looking at how online casinos will mitigate the tax increase, and what it means for you, the player, let’s first take a quick look at RGD and why the increase from 21% to 40% is near-fatal for some operators. 

What is Remote Gaming Duty? 

Think of RGD as a success tax the UK government levies on the “profits” the online casino generates – although it’s actually levied against Net Gaming Revenue – this is the revenue that passes through the casino, minus player payouts. 

Unlike VAT, which you see on a shop receipt, Remote Gaming Duty is paid behind the scenes by the operator based on their Gross Gaming Revenue (GGR) – this is the amount of money they keep after all winnings have been paid out to players.

Historically, this was set at 21%. However, as of April 2026, the government is nearly doubling this to 40%. To be clear, this isn’t a tax on your winnings (which remain tax-free in the UK), it’s a tax on the casino’s business. 

Here’s a quick breakdown, courtesy of the team at Jefferies, of how the tax increase is impacting online casino operators: 

Pre tax hike 

GGR – £133 

Promotion spend – £33 

Net Gaming Revenue* – £100 

RGD (21%) – £28 

Other costs – £60 

Profit = £12 

Post tax hike

GGR – £133 

Promotion spend – £33 

Net Gaming Revenue* – £100 

RGD (40%) – £53

Other costs – £60 

Profit = -£13 (so a loss)

*Net Gaming Revenue = Revenue after all costs such as bonuses have been removed. 

As you can see, the casino goes from making a £12 profit to making a £13 loss, and that’s just not sustainable. So how will online casinos look to mitigate this? 

How online casinos will mitigate the tax hike, and what it means for you 

Because a jump from 21% to 40% is such a massive shift in overheads, licensed operators have to find ways to balance their books to stay “in the green”. This isn’t about greed, it’s about business survival under a new legislative reality.

These are the most likely mitigation efforts you’ll notice as a player. 

1 – Adjusted Return to Player (RTP) percentages

What it is – the percentage of money wagered through a slot game that’s returned to players (on average).

What impact it might have – most slots have an RTP of 96% so expect this to drop to 94% or even 92%. This means your bankroll could go down a little quicker. While you’re unlikely to notice much of a difference over a single session, it helps the operator cover the increased tax burden over millions of spins.

2 – Restructured bonuses and promotions

What it is – the welcome offers and ongoing promotions you receive. 

What impact it might have – expect the “sticker price” of bonuses to decrease. Under new UKGC rules that went live this month (January 2026), wagering requirements are now strictly capped at 10x. 

While this sounds great for players, combined with the 40% tax hike, it means operators can no longer afford to give away £100 bonuses. You’re more likely to see smaller, high-quality cashback offers or a handful of free spins rather than the massive deposit match bonuses of the past.

3 – Streamlined loyalty schemes 

What it is – the rewards you receive for sticking with an online casino. 

What impact it might have – loyalty programs may become more “tiered”. Rather than broad rewards for everyone, operators will likely focus their best perks on the most consistent, long-term players to ensure their marketing spend is as efficient as possible.

4 – Reduced marketing presence 

What it is – the TV ads, social media campaigns and sponsorships online casinos use to drive brand awareness. 

What impact it might have – major brands have already indicated they may cut back on massive advertising campaigns to save costs, meaning you might see fewer “special sign-up” offers in your feed. 

Of course, if you join the Comparasino Member Zone, you get exclusive bonuses alongside your personalised casino matches.

These aren’t “punishments” for players, they’re necessary adjustments to ensure the online casino continues to operate legally, safely and sustainably in the UK. And in most cases, you won’t really notice any difference. 

Refuse temptation: Why it’s important to avoid unlicensed casino sites

Unlicensed sites get to play by different rules – they’re not licensed by the UK Gambling Commission, nor do they pay any taxes to the UK government. 

This means they can offer “more” than their licensed counterparts. I’m talking about bigger bonuses, higher RTPs and more generous rewards and loyalty perks. 

But these sites come with major drawbacks. This includes: 

No legal recourse: If an unlicensed site refuses to pay out a £50,000 jackpot, there is no avenue for complaint such as using an alternative dispute resolution body. Most of these casinos don’t even have a customer support team. 

Zero player protection: No deposit limits, no “cooling-off” periods and no ability to self exclude. Safe play is the best play, but at unlicensed sites, there’s no tools in place to help you manage your activity at the casino. 

Financial security: Unlicensed sites often have weak data encryption and no requirement to keep player funds in segregated accounts. If the casino goes down, your money goes with it. 

The value of playing at a UKGC license casino 

Comparasino only works with online casino brands that hold an active licence from the Gambling Commission so you can be sure that when you choose a casino through us, it’s reputable and trustworthy. 

These are some of the additional perks of playing at a licensed casino site: 

Fairness guaranteed: Games are independently audited for true randomness.

Fund protection: Your funds are kept separately to operational funds, ensuring they are better protected in the event the casino goes bust. 

Get your payouts without delay: Withdraw winnings in a matter of minutes at most UKGC licensed casinos. 

Independent dispute resolution: If you’re struggling to resolve an issue directly with the online casino, you can turn to an approved, independent, alternative dispute resolution body.  

The survival of the biggest

It’s not just about how you play, it’s about where you can play. A 40% tax rate makes the UK one of the most expensive markets in the world. This will likely lead to market consolidation. 

Smaller, independent casinos may be forced to exit the UK entirely, leaving only the “big players”. 

While these large brands are safe, it does mean players might have fewer brands to choose from. That being said, the Comparasino team works constantly to bring you new and exciting online casino brands.

We’re going through changes: 

The UK market is becoming more expensive for operators, which inevitably trickles down to the player experience. However, the cost of “safety” is always lower than the cost of being defrauded by an offshore site. 

And with Comparasino, you can always be certain you are playing at licensed, reputable and trusted online casinos that still provide a fun, entertaining and thrilling experience. 

Find trusted online casinos that match your preferences here.