When a tax lands on something people buy for fun, the question for households is a simple one: does it end up costing them more? It is a live question this autumn, with family budgets under pressure and entertainment one of the last things many people want to give up. One of the biggest tax changes of the year landed squarely on a form of entertainment that millions of UK adults pay for from their phones.
On 1 April 2026 Remote Gaming Duty, the tax on online gaming, went from 21% to 40% of operators’ profits. The Treasury’s answer to the household question was yes. Its official costing assumed that 89% of the rise would be passed on to customers through worse terms, and that people would spend less as a result. Six months in, the first company accounts written under the new rate suggest the bill has landed somewhere else first.
The first set of accounts points somewhere else
A great deal rides on the Treasury’s guess. Before any change in behaviour, the wider package of duty changes was worth £1,320 million to the Exchequer in 2026/27. Once the assumed price rise and the drop in demand that follows are built in, the certified figure falls to £810 million. HMRC expects roughly 95 businesses selling remote gaming to UK customers, and another 55 that sell it alongside other online products, to see higher bills. Three of the biggest have now published accounts covering the first months under the new rate.
Evoke, the owner of William Hill and 888, reported on 12 August. Revenue for the six months to June was £887.5 million, flat on a year earlier, while adjusted EBITDA fell from £165.9 million to £150.2 million. The company put the year-on-year increase in its duty bills at £46 million, mostly in the UK, and said more than half of it had been offset through “lower but more effective marketing investment, improved promotional efficiency and operational cost savings”. Separately, it closed around 200 of its shops in May.
Entain, which owns Ladbrokes and Coral, followed on 13 August. Its UK online revenue grew 13%, yet gross margin in the UK business fell 4.1 percentage points to 64.1%, a decline the company attributed primarily to the higher tax. Revenue held up and the margin took the hit, which is what absorbing a cost looks like on an income statement.
Rank, which runs Grosvenor and Mecca, reported the same morning. It cut above-the-line advertising (television, outdoor and other mass media) significantly, reduced headcount and supplier costs, and stated that “the customer proposition was protected, with free bets and incentives maintained”. It also warned that digital profitability “will inevitably step down” in 2026/27, once a full year at the higher rate runs through the numbers.
Across the three, the pattern is consistent. Revenue held or grew, the duty took a visible bite out of margins, and most of the gap was closed inside the business rather than at the till.
The price to the customer has barely moved so far
The policy paper is clear about where a pass-through would show up: in “a negative change in betting odds or return to player”. For the products this duty covers, that means the share of money staked that is paid back over time, known as the return-to-player rate, which is a published, checkable number. Six months in, the published RTP rates at UK online casinos do not yet show the Treasury’s 89% arriving: the review site casino.net records slot returns of 95.88% at bet365 and 96.00% at BetMGM, with most headline welcome offers still pitched at a £10 stake and sitting under the regulator’s 10x wagering cap. Those are the figures a customer would see change first if operators had started repricing in the open.
This is an early read rather than proof. Those rates are fixed title by title, often picked by the operator from a short list of versions each supplier has certified, and they are changed slowly. A repricing would more likely begin with thinner promotions, a quiet switch to lower-paying versions, or new titles launched at lower rates. A flat headline number in October is consistent with operators absorbing the cost for now. It is not evidence that they will keep doing so.
Advertising budgets took the first cut
Where the money came from instead is easier to see. A duty bill behaves like the regulatory charges that do not fall when business slows: it arrives whatever the trading conditions, so the cost lines that can be cut quickly go first. Broadcast advertising is the most obvious of those. It is large and can be paused within a quarter without breaking anything customers see.
Brand teams in other sectors made the same call in 2022, when media budgets were braked to protect margins as consumer confidence fell. Rank’s version is slightly more nuanced. It cut above-the-line spend while modestly increasing performance marketing, shifting money towards channels where each pound can be traced to a sign-up, a move that mirrors the wider drift of advertising spend towards formats that can be measured more precisely, from search to podcast sponsorship.
Evoke’s phrase “improved promotional efficiency” is worth translating. In plain terms it usually means smaller or fewer giveaways to customers, and Entain credits part of its UK growth to “AI-enhanced bonus optimisation”. That is a form of pass-through, just a quiet one, and it is the part of the bill most likely to grow as the full-year cost lands.
The next bill is already being drafted
The absorption has limits, and the companies have said as much. Entain told investors it expects to mitigate about a quarter of the UK tax impact this financial year, which leaves roughly three quarters of the cost unmitigated. A second step is already legislated, with remote betting moving to a 25% rate from 1 April 2027.
Then comes the Budget on 28 October. The Times reported in September that Treasury officials were examining increases to Machine Games Duty, the tax on cash-prize machines in venues; the Treasury has not confirmed any change. For households already working through the tax questions this year has raised, these duties are a small line. For the companies paying them, the question is whether the Treasury’s model eventually comes true.
That model is set out in the Budget 2025 policy costings, which also assume demand for the taxed products falls by 1.7% for every 1% rise in its price. The yield depends on customers paying more and playing less. On the evidence of the first six months, the people paying most visibly are the ones who used to sell these companies their advertising.
David Prior
David Prior is the editor of Today News, responsible for the overall editorial strategy. He is an NCTJ-qualified journalist with over 20 years’ experience, and is also editor of the award-winning hyperlocal news title Altrincham Today. His LinkedIn profile is here.
