Shares of gambling companies in the U.K. fell sharply as the industry is dealing with “pre-Budget anxiety”. With a planned tax raid that could be as high as £3 billion, some of their stocks went down by up to 16%.

The Treasury is currently considering two separate proposals. One of them follows recommendations from the Social Market Foundation which would see online gaming taxes increase by £900 million. The other one comes from the Institute for Public Policy Research (IPPR), which is pushing for a £3 billion tax.

It’s currently estimated that the government could increase the taxes by £2.9 billion in 2025 and up to £3.4 billion by 2030. The exact rate would still depend on the type of activity, with online casinos being taxed in full while lottery and bingo would remain untouched.

The impact on casinos in the U.K.

Luckily, this wouldn’t impact all places gamblers in the U.K. can play at. Offshore online casinos would, of course, remain unaffected, as they’re not regulated by the U.K. government meaning that their operations would continue as usual. Players could still play at fast withdrawal casinos and enjoy quick transactions and the other perks these platforms offer.

On the other hand, we could see these taxes taking their toll on U.K.-based casinos which have already lost significant amounts in market capitalisation following the news about potential tax increases.

While the industry remains concerned about the tax hikes, chancellor Rachel Reeves has downplayed the news. She said that the government is proud that these companies have chosen Britain as a place to put their money into and open up new job opportunities for its citizens.

The chancellor also added that the government wants competitive tax systems for all parts of the country’s economy.

While some also consider the market’s reaction to the potential increases to be “overdone”, it’s highly likely that they would impact gambling companies’ operations. They could see them being forced to cut down their marketing budgets and offer less favourable odds to punters. Smaller operators would also struggle significantly to absorb the costs.

The opinions on the topic differ with Cristian Gallardo commenting on Morningstar that the taxes on gambling companies in the U.K. are still “comparatively low” and these hikes wouldn’t create the crisis in the industry that is being indicated by the shifts in the share prices.

Gambling tax increases around Europe

Potential tax increases in the U.K. aren’t as surprising as they may seem as some other European countries have already implemented the same changes recently.

In July, Sweden raised its gambling taxes to 22% while the operators in the Netherlands will face a new 37.8% tax from 2026. France is currently considering allowing online casinos as it looks to collect more tax.

Even with the U.K. government downplaying the concerns over new tax increases, it’s believed the changes will have a significant impact on the operators in the country. Some larger firms might look to sell some of their assets while smaller ones may be looking to couple up. With plenty of changes anticipated, gambling industry bankers will definitely be keeping a close eye on the budget.

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