As the UK Government considers reshaping the way it taxes remote gambling, this report makes a compelling case against harmonising duties across betting and gaming. Instead, it argues for a smarter, fairer system of differentiated rates – one that taxes harmful, low-employment online casino products more, and supports traditional sectors like horse racing. The proposals could raise up to £2 billion annually while reducing harm and boosting public value.

Key points:

• The Government has been consulting on replacing the existing three rates of remote gambling duty with a single Remote Betting and Gaming Duty (RGBD). In it’s words, this would deliver a “modern, resilient, and agile tax system”, making it easier for businesses to comply. This report is a published version of a submission that the Social Market Foundation made to the Government’s 2025 consultation on the tax treatment of remote gambling.
• In it, we argue against the principle of merging, or what we call tax harmonisation. Rather than a single duty, Government should continue to differentiate between sectors based on their economic contribution and the fiscal costs caused by their activity – as is common practice in other jurisdictions and with other types of duty. In terms of gambling, this also means differentiating based on the relationship between that activity and any harm to individuals and society.
• Britain’s current gambling tax system is distorted by outdated rules and perverse incentives. Some types of remote gambling (such as online slots) are proven to be more harmful than other types of land-based gambling, while some land-based types of gambling are shown to support more economic activity. Yet the tax system does not reflect this. We argue that remote gambling should be taxed at a higher rate than land-based gambling.
• In terms of remote gambling, merging different remote betting and gaming duties into the same single rate would risk precipitating more harm, incentivising operators to drive customers away from more-expensive, less-harmful activities such as single event horse racing betting to less-expensive, more-harmful activities such as high frequency online slots.
• This report proposes a system of differentiated rates. Sectors which are more harmful and contribute less to the British economy, such as online slots, should be taxed more; while sectors which are less harmful and provide more to the economy, such as traditional horse racing betting, should be taxed less.
• In conclusion, in this report we have proposed to:Increase the Horserace Betting Levy contribution to 20%
  Reduce betting duty on horse racing to 5%
  Increase Remote Gaming Duty to 50%
  Harmonise General Betting Duty across all betting products at 25%
  Exempt small business
• Our proposed increase of Remote Gaming Duty to 50% and harmonisation of GBD at 25% would raise around £2bn in additional tax revenue for the Government. As well as raising additional revenue for the Treasury, our proposal would disincentive harm, it would provide the funds needed for British horse racing to remain sustainable, at the same time as protecting small and independent business.