The way the gambling industry is taxed varies sharply depending on where operators are based. In the UK, gambling is taxed at the operator level, not the player level, which is a major reason why punters don’t pay tax on their winnings. However, for companies running gambling platforms, where they are licensed and headquartered, can make a real difference to their bottom line.
Different tax regimes shape how these businesses operate. While the UK has one of the most established regulatory systems, it’s not always the most appealing from a tax perspective. For this reason, many gambling brands have looked to EU countries or offshore jurisdictions to set up shop. These places offer lower tax rates or more flexible rules that attract international operators.
Gambling Taxes in the UK
In the UK, the main tax applied to gambling businesses is the Remote Gaming Duty (RGD). This is charged at 21% of a company’s profits from UK-based players. There are also other duties, such as General Betting Duty (GBD) and Pool Betting Duty (PBD), but RGD is the most relevant for online casino operators.
All gambling companies that offer services to UK players, regardless of where they’re based, are required to register with HMRC and pay the appropriate duties. The UK Gambling Commission also enforces strict licensing rules, including affordability checks and limits on promotions.
These regulations help protect consumers, but they also increase operational costs for licensed brands. As a result, some operators look for alternative jurisdictions with lighter rules and lower taxes.
The Rise of Offshore Casinos
Some companies have shifted their focus to offshore locations, where they can operate under less restrictive terms. These jurisdictions often tax businesses at much lower rates, sometimes as low as 0% on gambling profits. Countries like Curaçao, Malta, and Gibraltar have become popular choices for this reason.
This shift has helped drive the growth of non GamStop casinos in the UK 2025 reviewed by various affiliate and comparison sites. These platforms can legally accept UK players. They’re regulated elsewhere and aren’t bound by UK tax or licensing rules.
This gives them freedom to offer bigger bonuses, fewer restrictions, and a wider selection of games. It also means they don’t contribute tax revenue to the UK in the same way domestic brands do. It’s one reason why the government is keeping a close watch on the offshore sector.
EU Jurisdictions
Within the European Union, some countries have carved out a name for themselves as gambling hubs. Malta, for instance, has a well-established licensing body and taxes operators at rates starting around 5%.
The EU’s rules can be stricter than offshore jurisdictions, especially when it comes to anti-money laundering and player protection. Yet they still allow for more flexibility than the UK. This balance has made EU licenses popular with companies targeting multiple European markets.
There’s also a political element. As the UK is no longer in the EU, operators licensed in EU countries don’t get any special treatment when serving British customers. They still need to comply with UK tax laws if they want to serve the UK market directly.
Why Location Matters
Tax is one of the biggest costs for online casinos. Choosing the right licensing jurisdiction can mean the difference between breaking even and turning a healthy profit. The higher the tax, the more operators are forced to reduce bonuses, cut marketing budgets, or raise house edges.
This has a knock-on effect on the player experience. UK-licensed sites may appear more restrictive because they must comply with both tax and regulatory requirements. Casinos based in more relaxed jurisdictions often use their financial advantage to be more generous with promotions or to spend more on player acquisition.
The Government’s Response
The UK government has started talks about tightening rules on advertising offshore brands and increasing cooperation with other jurisdictions. But it’s not easy to enforce rules on companies based abroad, especially if they do not have any physical presence in the UK. Enforcement often comes down to whether payment providers, hosting companies, or affiliates can be held accountable.
At the same time, UK-licensed brands are lobbying for lower tax rates or other forms of relief. They argue that the current system makes them less competitive compared to offshore rivals, and that more needs to be done to level the playing field.
Conclusion
Tax policy has become one of the biggest dividing lines in the online gambling world. The UK’s 21% Remote Gaming Duty may fund public services and help uphold regulatory standards, but it also makes it harder for domestic brands to compete with EU or offshore operators.
For players, the tax location of a casino doesn’t usually make a difference to their personal finances, since winnings aren’t taxed. For businesses, though, the choice of jurisdiction could decide their long-term survival. As more players turn to non-UK sites, regulators and tax authorities will need to adapt, or risk seeing even more revenue flow overseas.
also read: The Rise of Cheats in Online Gaming: Pros and Cons
