The British Government has officially announced a significant increase in the online lottery tax rate, facilitated by several months of work by parliamentarians and a special committee of the Treasury. The British Treasury Department has indicated that the full implementation of the new policy is expected to increase public finances by over Pound1 billion per year.
The new tax system will significantly increase the tax on digital lottery while protecting traditional lottery patterns. The Government clearly distinguishes between online products and physical activities (e.g. horse racing, bingo games) and considers online games to be more socially harmful, requiring them to bear higher taxes. With effect from 1 April 2026, the tax rate for online games jumped from 21 per cent to 40 per cent; the bingo game hall was fully exempt from the bingo lottery tax. From April 2027, the rate for remote betting (including online sports fairs) was raised from 15 to 25 per cent; the rate for home-grown horses was maintained. And the current tax rates are maintained for all sub-line locations such as entity shops and racetracks.
According to the British Revenue and Customs Administration, policy adjustments are based on two main realities: the explosive growth of the online lottery industry and the growing evidence of “social harm caused by addictive digital products”. The Ministry of Finance Committee report stressed that Internet gambling, driven by the spread of smartphones and “addiction design”, has gained market dominance, in stark contrast to a decade ago. The Commission has repeatedly rejected the argument that some gambling enterprises “on-line gambling is not socially harmful”. The Parliamentary Inquiry last year found such claims “lack of credibility” and warned that the most addictive online products had little benefit to the community but put countless families at risk.
Meg Hillier, Chairman of the Commission of the Ministry of Finance, publicly supported the tax policy as a sign of “a more pragmatic attitude” by the Government towards online lottery social hazards, which is a key innovation in the tax system in the digital age. The Ministry of Finance has positioned the reform as an important link in “building a fair and sustainable tax system”. The statement noted, inter alia, the low social harm caused by popular participation in such activities as horse racing, beach games and community bingo halls, “to protect traditional business practices that carry cultural and economic values and avoid excessive shocks to the regional economy”.
