Taxation

In the UK, the gambling tax system is divided into forms and channels. One of the key taxation regimes is Remote Gaming Duty (RGD) - a tax on remote (online, etc.) games that are provided to players in the UK. It refers to the operator credited with revenues from UK players and the rate from 1 April 2019 is 21% of profits. Below - in detail: definition, rate, start of action, calculation, registration, reporting, prospects.

What is Remote Gaming Duty

RGD applies to "remote gaming" - a definition given in Finance Act 2014 (ref. section 154 et seq.) and Excise Notice 455a (HMRC). "Remote gaming" refers to games of chance with a prize, which are provided via the Internet, telephone, television or other electronic communication.

"Gaming provider" - a person who contracts directly with a British player. If the operator does not contract with a UK person, the duty of the RGD may not come.

Rate and start of application

From April 1, 2019, the RGD rate is 21% of the operator's profit from remote gaming, aimed at UK players.

Prior to that, the rate was 15%.

The rate increase was announced in Budget 2018 and took effect for reporting periods beginning October 1, 2019 or later.

Who is covered by

Operator providing remote gaming to a person defined as "UK person" - an individual resident in the UK or a corporation registered in the UK.

The "place of consumption" behavior is enshrined earlier (since 2014) and means that even an offshore operator is obliged to pay British tax if its services are available to UK players.

How is it calculated

Profit = amount of game payments (stakes, participation charges, etc.) from UK players minus amounts of payments to winning UK players or prizes/pools dictated by the rules.

If the pool is mixed (UK + non-UK), the operator must proportionally determine the share of UK investments and payments.

The operator is required to register with HMRC as an RGD payer and submit reports, even if the profit is zero ("nil return").

Responsibilities of registration and reporting

Registration - at least 31 days before the start of activities, 14 days for some jurisdictions.

Reporting through HMRC's Gambling Tax Service (GTS) system.

Record retention: all game payments and payouts from UK players, pool data, share calculations, etc., minimum 4 years.

Liability: If the operator has underpaid, HMRC can collect the debt from the operators as well as from ROL licence holders etc.

Relationship with other taxes on excitement

In addition to RGD, there are General Betting Duty (GBD) for rates - a rate ≈ 15% profit.

Pool Betting Duty (PBD) - bets where the winners participate in the general pool, the bet ≈ 15% of the bet amount.

The government is consulting (as of 2025) on combining these three modes into a single "Remote Betting & Gaming Duty (RBGD)." This could lead to a new rate and a revision of the tax base.

Why the 21% rate and what matters

The increase to 21% (from 15%) is due to the government's decision to offset other tax/rate cuts (such as on FOBTs) and account for the rise of online gaming.

For operators, this means a significant tax burden - it is important to take into account when pricing, margin and marketing strategy.

Reporting, audit, compliance: errors can lead to fines, license revocations, additional ("penalty") charges.

Prospects and risks

The UK Treasury is considering a single RBGD rate, which could change the tax burden.

Operators warn that the sharp rise could make the sector "economically unbearable."

Players (through sports/horse racing) warn that a tax increase can reduce investment in the sports sector.

What operators should know

Determine whether your services fall under the RGD: whether there are UK players, whether you enter into a direct contract, where the pool/platform is located.

Set up accounting and systems so that you can report on UK players: breakdown by jurisdiction, income, payments.

Prepare GTS reports, ensure data storage for at least 4 years.

Consider the 21% rate in the business model and risk assessment: margin, payments, marketing - everything should be under control.

Follow the RBGD reform consultation and prepare for change.

What it means for the economy and players

For the UK budget, RGD is a significant source of revenue: for example, an increase from 15% to 21% was calculated to add hundreds of millions of pounds.

For players: Although the operator pays the tax, this can indirectly affect odds, promotions and bonus terms.

For the market: a high rate encourages operators to optimize, reduce costs, but also increases the barrier to entry and increases the incentive to unlicensed activity.

The 21% rate for Remote Gaming Duty is an important element of the UK's online gaming tax system. It reflects the transition to a "point of consumption" model, the transfer of response to operators and increased control over the online market. Operators must carefully follow registration, reporting and calculations; a reform called "Remote Betting & Gaming Duty" could lead to even higher rates or a changed base. Tax policy remains a key factor in strategic planning in the industry.