Over the past year, there has been a lot of noise about hiking gambling taxes. So as someone who’s made a living from betting, I see beyond the headlines…
Some politicians want to raise remote gaming duty on online casinos and slots to as high as 50%, up from the current 21% and general betting duty from 15% to around 25–30%.
For sports betting and horse racing fans, this could be a bigger problem than first realised…
Supporters say this could pull in roughly £3 billion in extra revenue to tackle child poverty. However, Critics warn it will devastate the industry and drive vulnerable punters further underground to black market sites.
So, let’s take a look beyond the emotive and somewhat emotive headlines…
The Tax Impact on Betting Shops
The companies with brick-and-mortar shops are the most vocal (and vulnerable). Betfred’s founder Fred Done said that raising duty to 35–40% would wipe out profit, and prompt him to close all 1,287 shops, risking 7,500 jobs. William Hill’s parent company Evoke has said it might shut up to 15% of its estate, about 120–200 outlets. Entain, owner of Ladbrokes, has hinted at similar cuts.
To them, this isn’t a bluff; it’s survival.
Politicians, though, see a sector that turns over billions, and is largely unpopular – a soft target. A coalition of 101 Labour MPs is pushing to lift remote gaming duty to 50% and general betting duty to 30 %. They argue that the money could scrap the two‑child benefit cap and ease poverty amongst children.
But how will it raise extra money if all these shops shut? No amount of emotional headlines about children and puppies is going to change that fact…
Fewer jobs means less income tax, less corporation tax, less business, shop-front rental and betting duty…
What Does This Mean for Punters and Traders?
What does any of this mean when you open your Betfair screen?
First, remember that general betting duty is paid on the commission Betfair takes from your winning bets. If it goes up, Betfair’s costs rise. That often means higher commission or fewer promotions. Many punters moaned about the premium charge when it arrived; a similar moan could follow if taxes jump.
Second, the collapse of retail shops will push more punters online. If thousands of ordinary bettors suddenly switch to apps, Betfair Exchange liquidity will swell. More money in the pools is great for Betfair scalping; novices make mistakes, and their hesitation adds ticks you can pick off.
On the flip side, a larger pool of inexperienced punters can spike volatility (you need to stay calm when prices swing).
Third, heavier taxes on online slots mean operators will squeeze margins elsewhere. They might widen betting overrounds on fixed‑odds sports books, slash free bets and reduce marketing. That could make the exchange relatively more attractive, but it also means you’ll be relying on your own judgement rather than juicy sign‑up offers. As the Regulus Partners blog points out, when taxes rise the incidence usually falls on punters through worse odds.
Adapting to Changes…
When I began trading, regulatory shifts would send me into a spin. Years of screen time taught me that staying level‑headed beats chasing headlines.
Here’s how I see it:
- Play the prices, not the politics. Taxes come and go but market behaviour tells you everything. If the overround on a football coupon creeps to 110%, there’s more value on the exchange. Watch where liquidity pools and look for mispricings.
- Account for bigger spreads. If fixed‑odds bookmakers worsen their margins, expect bigger gaps between back and lay prices. That’s bread and butter for scalpers. Get in, scratch a tick, and get out fast.
- Build the tax into your staking. If Betfair’s commission rises, adjust your stakes. Trading remains more cost‑effective than taking a bookmaker’s 110% overround; you just need to factor the cost into your expected return.
- Ignore the black market lure. Higher taxes may tempt some to offshore sites. Apart from the legal risk, there’s no recourse if your funds disappear. Liquidity is patchy, so it’s not worth the hassle.
A Slightly Lighter Perspective:
It’s easy to doomscroll news about tax plans and forget that we trade because we love the game. Whether the government hikes duties to 50% or settles for a modest rise, the core principles stay the same. Our job is to understand how markets move, manage risk and act decisively. The coming changes might shut betting shops and tighten corporate margins, but they could also funnel more action to the exchange. That means more opportunities if you’re prepared to adapt.
So when you next log on, don’t worry about the Chancellor’s speech. Watch the prices, stay nimble and remember: change is part of this game.
Those who accept it and adjust stand to profit.
Related: Understanding the Over-round (Betting Odds Explained in Full)
