Gambling and Betting Tax in the UK – Do I Need to Pay Tax? What Tax Do Operators Pay?

In short, for the customer there is no tax to pay on either bets or any subsequent winnings in the UK. If you are not based in the UK you may be liable for tax in your own jurisdiction. If you take any winnings back to that territory, you are advised to check in advance.

It may seem strange to some people that the UK Government don’t want a slice of the pie from punters. Don’t worry, the government still get their two pounds of flesh, they just take it direct from bookies in the form of a point of consumption tax.

Tax laws were changed in 2001, then again in 2014 and 2018 to reflect the changing nature of gambling moving from the high street to online. These new laws removed the need for the bettor to directly pay a levy, this was instead shifted to the bookmaker in a move designed by the government to increase tax revenue from online operators based off shore.

The 2025/26 budget by Rachel Reeves changed the tax landscape again, but this time, it was more of a cash grab. Although the onus was still on the bookie or casino rather than the customer.

Beware however, there are some instances in which tax may need to paid, such as in the case of index and financial betting. In this article we tell you everything you need to know about betting tax, we tell you if you need to declare winnings, what to do if you’re a professional gambler, the old rules, history and more.

What was the old Gambling Tax Law?

Prior to the 1960 Betting and Gaming Act it was illegal to place cash bets away from licenced race courses and tracks. The 1892 Gaming Act created the Totalisator board, commonly known as the Tote, set up to accept wagers at race courses and greyhound tracks from punters. It was however illegal to take bets off site unless these were made by post or over the phone.

Many illegal bookmakers operated throughout these periods and the large betting black market that ensued showed the government there was a huge demand for off site bookmaking, and crucially this could be taxed. This led to the 1960 Act that principally regulated and licenced high street betting shops.

The first shops opened in 1961 but under the condition that a new levy was to be charged at 6.75% to bookmakers. Bookies passed this on to punters in the form of a 9% betting tax. The tax could either be paid at the time of placing a bet or on the winnings instead. A levy of 9% on winnings can be a lot of money so most people elected to pay the tax on the stake.

By the time of the new millennium, the betting landscape was changing with more and more gambling moving towards telephone betting and betting online. This allowed companies to move offshore to tax havens such as Gibraltar, Malta, The Caymans, etc., from where they could allow punters to bet tax free. The earliest and most famous of these migrating companies was the bookmaker named after Victor Chandler, now known as BetVictor. Victor moved his operation to Gibraltar in 1998 and this was said to be the final straw for the then Chancellor Gordon Brown who legislated a change to the gambling tax law.

In 2001 the betting levy was abolished and replaced instead by a 15% tax on bookmakers gross profits in the UK at point of supply. This was a landmark day for punters in Great Britain, who could now bet tax free win or lose. However, bookmakers are businesses and therefore simply passed that cost on to the customer. So you are still indirectly paying the tax today in the form of poorer odds and bigger operator margins.

Unfortunately, this new legislation didn’t solve the ultimate problem, as more and more betting companies moved their online operations offshore. Since it was a ‘point of supply’ tax, offshore gambling brands were charged tax based on where they were based, meaning they would pay the local tax rate on profits instead of full UK tax. In Gibraltar for example this was capped at 1% or a maximum of £400k.

This didn’t just result in the online-only operators moving abroad, it also caused the bigger, older, high street names, such as Coral, to relocate. Their high street business remained in the UK, with profits liable to UK tax, but all of the online activities were moved abroad to save tax. As the online industry steadily grew over the subsequent decade, this problem became more and more apparent to the treasury.

What is the current Gambling Tax Law?

In 2014, an amendment to the 2005 Gambling Act was issued.

This contained a new 15% point of consumption tax on all gross profits. This meant off shore companies were obliged to pay tax on profits earned from UK based customers to the UK treasury. Failure to do so would mean the betting company would not be re-issued with, or could not obtain, a UK gambling licence.  As it is a legal requirement to have a licence to offer gambling services in the UK this also means it is a legal requirement for all operators to pay the tax.

This was a major change, taxing the profits on where the customer was based, not where the business was based, and it set the groundwork for where we are now.

In his 2018 budget, the UK chancellor, Philip Hammond, announced that a higher 21% point of consumption tax would be imposed for online gambling on ‘games of chance’, up from 15%.  This applied to casino games like slots, table games like blackjack, poker, virtual or any other fixed odds game of chance, and it came into effect on the 1st October 2019.

Then came Rachel Reeves with her 2025/26 budget. With gambling tax increases normalised and easier to collect, more raises followed.

The main effect online casino and sportsbook customers will notice will be poorer odds on bets and worse return to player amounts on games, as online gambling companies will largely pass on these costs to the customer.  The competitiveness and profitability of the industry should mean at least some of these costs are borne by the gaming companies, but it will be minimal.

We may also see more companies leaving the UK market due it being a much more hostile environment to trade in.

Gambling Tax FAQ’s

Do Professional Gamblers Pay Tax?

Professional gamblers, or those who live off the proceeds of fixed odds gambling, do not need to pay tax whatsoever on their winnings. Conversely, you obviously cannot get a tax refund on your losses either!

If you are a resident in another country, you may be liable to pay tax on your winnings.  This could be the case if you either declare tax in another country or you try to take the money back into another territory. Check your local betting tax laws if you are unsure of the gambling tax where you are based.

I’m a visitor to the UK do I have to pay gambling tax?

You do not need to pay a penny to the UK government, but depending on the laws in your country you may be liable to declare any winnings.

Beware, however, that should your winnings be in physical cash, you will have the decalre anything over £10,000 when leaving the UK, and if you are travelling outside of the EU you are restricted to taking a maximum of €10,000 (or equivalent) in cash out of the country at any one time.

Do I pay tax on Spread Betting?

Spread betting and index betting are not regulated by the UK Gambling Commission, but instead fall under the umbrella of the Financial Conduct Authority (FCA). Despite this, you do not need to pay Capital Gains Tax or stamp duty on winnings from Spread Betting. You also do not need to pay tax when betting on fixed odds currency and market fluctuations with bookmakers.

Even if you call spread betting your primary source of income or your day job, you won’t be liable to pay tax, but you can’t write off any loses either.

If you trade on the stock markets this is a different story. This form of trading is liable to full capital gains tax and stamp duty.

Do you need to declare winnings to the government?

The short answer is no, your winnings are not taxable so you do not need to declare them. Likewise you won’t get any rebate against your losses so declaring them would be pointless.

If you have won a lot of money it helps to declare it to the treasury on your tax return if you complete one, but you don’t have to.  There is a specific box where you can enter gambling winnings.  You won’t be taxed and this could help in any future investigations if you are audited.

It certainly helps to keep records and receipts of your winnings as proof of how you obtained the cash. Often high value purchases require a fraud check and if you have no proof of where your money came from it can land you in hot water.  Even if you want to make a large purchase in cash (a car, a house, etc), then you will need to show where the money came from.  Yet another reason to only bet with UK licenced reputable, tax paying, bookmakers.

Can I give or gift my gambling winnings away?

Yes and no. If someone inherits your winnings they will be liable to inheritance tax if your estate is large enough. You can give your money away to people or charities but this may be liable to inheritance tax should you die within 7 years of the gift. You can give up to £3,000 tax free each year (to any one person or split between several people), and you can give £250 away in a gift to anyone you like so long as that person has not also received part of your £3,000 exemption.

Should you give more than this away and you die within 7 years you will be liable for a percentage of the tax, this is known as the tapor rule. If you live longer than this this is now exempt from inheritance tax.

Do I need to pay gambling tax in other countries?

If you win in a country that taxes gambling profits then you will pay the tax at the point of supply, and so you don’t need to declare it. If you want to bring winnings back into the UK (or any cash for that matter) you may be restricted on the amount of cash you can bring in to €10,00 Euros (or equivalent currency value) if travelling from outside the EU.

For more about betting abroad see our dedicated page.

History of Gambling and Betting Taxes

Gambling and betting was not taxed effectively in the UK for most of history. Unlicensed gambling was causing such a legal and moral problem to the Victorians that the parliament of the time issued the Gaming Act of 1845. This made a wager unenforceable by law and therefore rendered all contracts between bettor and bookie invalid. This didn’t stop gambling but it certainly made it an underworld practice.

In the late 1800’s gambling was finally allowed, but only from the government run Totalisator Board (Tote) at select tracks and courses. The tote could conveniently set odds and pump profits back into the Treasury.

Over time some one-off exceptions emerged such as the Football Pools. This was a betting phenomenon and for most people in the UK the only experience of gambling they had. Despite legal battles with the football league and sneering from the government the pools were classed as a low wager competition and was allowed.

By the late 1950’s black market betting was rife and the government had neither the resources or the motivation to stop it. In an “if you can’t beat em’ join em'” approach the government licenced off site betting shops under the 1960 Acts and the betting levy at the same time that remained in place until 2001.