Gambling Tax UK – Is Gambling Tax-Free In the UK?
The United Kingdom is home to one of the largest gambling sectors in the world, with a Gross Gaming Revenue (GGR) of about £18 billion in 2023. One of the reasons behind this success is the gambling tax in the UK, designed to put the tax burden on operators rather than players.
Before you place your first wager, it’s worth knowing the basics about tax on gambling winnings in the UK in case you get lucky. We’ve also explained how taxes are different if you’re a professional player and the impact of legislation on the industry.
Do You Have to Pay Tax on Gambling Winnings in the UK?
If you’re one of the over 22 million adults in Great Britain who gamble at least once a year, you’re probably asking yourself, “Is gambling tax free in the UK?” The answer is yes.
Players do not pay tax on gambling in the UK, regardless of how much they win. No matter whether your earnings come from sports betting, bets on horse races, casino games, lotteries, or poker, winnings remain tax-free for individual players.
Unlike in other countries where winnings are subject to income tax, the HM Revenue & Customs (HMRC) does not tax players who do not gamble professionally. Instead, taxation applies to gambling operators through duties based on their revenue.
Legislation Covering Gambling Tax UK
UK gambling tax is governed by several key pieces of legislation as listed below:
- Gambling Act 2005: Established the regulatory framework for gambling activities and operator licensing.
- Finance Act 2014: Introduced the point of consumption tax, ensuring that remote operators offering betting services to players in the United Kingdom pay fees, even if they are based offshore.
- Finance Act 2021: Updated some tax structures, including duty increases on certain gaming activities.
HMRC oversees gambling taxation, ensuring compliance with the pertinent laws. However, since earnings from land-based and online gambling is non-taxable in Great Britain, it’s mainly operators that need to stay up to date with these rules.
Helpful Tip: Since the UK’s payout tax rate is 0% for non-professional players, you don’t need to read through current legislation. However, laws may change in the future so it’s a good idea to stay abreast of the latest changes.
UK Gambling Tax for Operators
While players are exempt, a UK tax on gambling applies to operators, including top online casinos. Licensed businesses are required to pay various duties based on the type of gambling services they offer. These duties ensure that the government collects revenue while allowing gamblers to enjoy tax-free winnings.
General Betting Duty (GBD)
Operators offering fixed-odds betting, both at land-based betting shops and online sportsbooks, are required to pay tax on gambling winnings in the UK according to HMRC guidelines. Different bands apply depending on the type of betting options offered.
| Type of Betting Service | Tax Rate |
| Fixed odds and totalisator bets | 15% |
| Spread betting | 3% (financial) and 10% (other) |
Remote Gaming Duty (RGD)
The gambling tax in the UK for remote gaming, including live casinos, is currently set at 21% of GGR. This tax applies to all UK-licensed operators that offer these services.
Gaming Duty
Casinos are required to pay tax under a tiered system. This means that the tax rate increases with revenue as outlined below.
| Gross Gaming Yield (GGY) | Tax Rate |
| The first £2.686 million | 15% |
| The next £1,852 million | 20% |
| The next £3.243 million | 30% |
| The next £6.845 million | 40% |
| Remainder | 50% |
Lottery Duty
Tax on gambling winnings in the UK does not apply to players but does to operators. These must pay a 12% rate on ticket sales which go towards funding charitable causes and other public amenities.
Machine Games Duty (MGD)
Gaming machines, such as online slots, are subject to tiered bands in the UK. The final rate is based on their stakes and potential winnings as per below:
| Machine Games Type | Tax Rate |
| Type 1 (20p stakes or less) | 5% |
| Type 2 (21p – £5 stakes) | 20% |
| All others (stakes above £5) | 25% |
The Impact of UK Gambling Tax
UK tax on gambling winnings benefits players by allowing them to keep 100% of their winnings without concerns about taxation. Meanwhile, the government collects revenue from gambling operators, which helps fund public services.
As a result, the sector continues to grow steadily, with a forecast Compound Annual Growth Rate (CAGR) of 3.13% between 2025 and 2029 for online gambling.
UK Gambling Winnings Tax for Professional Players
Professional gambling is a grey area in UK tax law. Professional gamblers are not taxed on their winnings because HMRC considers gambling to be an activity of chance, rather than a rather or profession. However, if a gambler has additional sources of income tied to gambling, such as endorsements, sponsorships, or content creation, those earnings are likely to be subject to tax.
Moreover, if gamblers consistently make gross profits whilst gambling, such as at online poker sites, and demonstrate a structured approach similar to a business, HMRC may investigate whether their activities classify as a trade. In such cases, self-employment tax obligations could apply.
Tips to Pay No Gambling Tax in the UK
Follow our simple tips to access a tax rate of 0% while betting and gaming.
- Always choose licensed operators: To stay safe and benefit from a zero gambling tax rate, always play at gambling sites licensed by the UK Gambling Commission (UKGC). Legal, UK-based sites must be licensed by this regulator and adhere to stringent safety and fairness practices.
- Be aware of foreign tax laws if needed: This tip only applies if you intend to gamble on an offshore site or in a foreign country. In these instances, check if winnings are subject to local taxes before you play. If in doubt, check with a tax advisor or another qualified professional.
- Seek financial advice if you are a professional gambler: If gambling is your main source of income, you may be taxed on part or all of your income. You may also be taxed if you’ve received sponsorship or any other type of paid endorsement. To avoid fines and interest, it’s best to check with a qualified tax advisor.
- Keep records of your gambling activity: While taxation does not apply to your gambling winnings in the UK, tracking your winnings and losses helps you manage your finances and gamble responsibly. By doing so, you’ll be less likely to spend more than you afford.
FAQs
Do I pay tax on gambling winnings in the UK?
What is the UK gambling tax rate?
What is the tax on gambling winnings in the UK according to HMRC?
What is a pool betting duty in the UK?
Resources
- https://www.legislation.gov.uk/ukpga/2005/19/contents
- https://www.legislation.gov.uk/ukpga/2014/26/contents
- https://www.legislation.gov.uk/ukpga/2021/26
- https://community.hmrc.gov.uk/customerforums/pt/ffa28a0d-cd25-ef11-a81c-002248c86c61
- https://www.gov.uk/government/publications/excise-notice-451a-general-betting-duty/f71edd3c-b003-4cd7-971a-4ca1004ebd77
- https://www.gov.uk/government/publications/rates-and-allowance-excise-duty-gambling-duty/excise-duty-gambling-duty-rates
- https://www.gov.uk/guidance/lottery-duty
- https://www.statista.com/outlook/amo/online-gambling/united-kingdom
- https://www.gamblingcommission.gov.uk/about-us/what-we-do
