Gambling Providers Take £1.5BN Budget Hit

File image of Chancellor Rachel Reeves. Picture by Kirsty O’Connor / Treasury.

UK-listed gambling companies have been hit with a multi-billion pound tax hit by Chancellor Rachel Reeves.

The Treasury announced £30BN of additional taxes to offset a deterioration in the public finances, with gambling taxes expected to contribute around £1.5BN of that total.

Kathleen Brooks, research director at XTB, says the sector was always sitting squarely in the line of fire after the Chancellor abandoned proposals to increase income tax rates.

Some sectors will be more directly exposed to the Budget than others. This includes gambling firms, real estate and UK banks," she says. "Now that the chancellor has abandoned raising income tax, the gambling tax, a windfall on UK banking profits and property taxes are all on the line."

Fears of a tax raid on the UK's gambling and gaming sector was well telegraphed. Entain, one of the UK’s largest gambling groups and owner of Ladbrokes and Coral, has seen its stock fall around 8% over the past month as investors rotate out of industries most vulnerable to fiscal tightening.

The company’s valuation briefly rebounded more than 3% on Thursday, following reports that online betting and casino operators were preparing to pass any tax increases directly onto consumers to maintain profit margins.

Brooks says this move may have shifted investor sentiment. "This price action suggests that if the Budget is not as bad as feared, stocks that had been at risk from Budget tax rises could rebound after Wednesday," she notes.

For operators, the ability to offset higher taxes through customer-facing adjustments could prove pivotal; for customers, however, it raises questions about future pricing, bonuses and gaming value.

The impact is likely to be most visible in online verticals where margins are already tightly managed.

For example, the online casino ecosystem surrounding products such as online roulette could see altered payout structures, reduced promotional offers or higher wagering requirements if firms choose to shield their bottom line from rising statutory costs.

Entain’s reported willingness to adjust consumer pricing strategies has therefore become a focal point for analysts tracking how the sector will digest the new tax architecture.

The expected £1.5bn contribution from gambling taxes would represent one of the most significant single-year cost increases for the industry in more than a decade, especially following recent regulatory moves such as the statutory levy on gambling harm, affordability assessments and newly imposed online slot stake limits.

Companies with heavy UK exposure face the greatest sensitivity, though international operators with British licences may also need to prepare for higher marginal tax rates on domestic activity.