When Sir Gavin Williamson stood up in the House of Commons recently, he wasn’t just defending a company. He was defending an economic lifeline for thousands of families in Staffordshire. The senior Conservative MP sounded the alarm over the government’s decision to dramatically increase gambling taxes, warning that bet365, one of Britain’s most successful tech companies, could face serious trouble ahead.
The tax hike isn’t just another policy tweak. It represents one of the sharpest increases in gambling taxation anywhere in the world, and it’s forcing operators across the UK to make tough choices about their future.
Why Stoke-on-Trent Has So Much at Stake
To understand why this matters so much, you need to know a bit about Stoke-on-Trent’s history. This city was once the heart of Britain’s pottery industry, employing tens of thousands of people in ceramic factories that dotted the landscape. At its peak in the 1920s, the ceramics sector provided work for around 100,000 people. Coal mining was another pillar of the local economy, with pits across Staffordshire employing up to 20,000 workers.
But those days are long gone. The decline of British manufacturing hit Stoke hard. By 2009, ceramic industry employment had crashed to just 9,000 jobs, down from 45,000 in 1975. The steelworks closed in the 1980s, the last coal mines shut down in the 1990s, and the Michelin tyre factory eventually followed. For decades, the city struggled to find its footing in a post-industrial world.
That’s where bet365 comes in. The company, founded by Denise Coates in 2000, has become the largest private-sector employer in Stoke-on-Trent, with around 5,500 staff working at its headquarters in the city. It’s not just any employer either. These are high-skilled, well-paying technology jobs, the kind that many post-industrial cities can only dream of attracting.
The company’s impact extends beyond its direct employees. Research shows that Stoke’s ICT sector, anchored by bet365, now accounts for 11.3% of the local economy’s gross value added, despite representing only 4.1% of employment. The sector’s productivity performance is impressive too, with labour productivity in Stoke’s ICT sector reaching £155,000 in 2022, ranking seventh out of 168 regions in Great Britain.
The Tax Changes That Have Everyone Worried
So what exactly is changing? Starting in April 2026, the government will raise the tax on remote gaming, which covers online casino games, crypto slots, and similar products, from 21% to a whopping 40%. That’s not a typo. The rate is nearly doubling.
A year later, in April 2027, a second increase kicks in. The tax on digital sports betting will jump from 15% to 25%. The government has carved out an exception for horse racing, which will remain at 15%, but most online gambling products will face these much higher rates.
The government expects these changes to raise over £1 billion annually by 2029-30. Chancellor Rachel Reeves justified the increases by pointing to the higher levels of harm associated with online gambling compared to traditional betting.
During the Budget debate, Sir Gavin Williamson didn’t mince words. He warned that this budget could potentially destroy one of the UK’s most successful technology sectors. He emphasized that bet365 has been one of the most responsible employers, investing in the local community, supporting charities, and paying its taxes in the UK.
How bet365 Fits Into the Bigger Picture
To appreciate the scale of what’s at risk, it helps to understand just how big bet365 has become. The company reported revenues of £3.72 billion for the year ending March 2024, up 9% from the previous year. After a brief dip into losses the year before, the company returned to operating profits of £396 million.
bet365 serves more than 90 million customers across 100 countries. It’s one of the world’s largest online gambling operators, competing with giants like Flutter Entertainment, Entain, and increasingly, American players like DraftKings.
The company’s strength has historically been its in-play betting technology, which it could deliver globally better than almost anyone. But the competitive landscape has gotten tougher. As one analyst put it, life was far easier when the competition was limited to traditional UK brands like William Hill and Ladbrokes, before newer tech driven operators and US heavyweights heightened the pressure.
Denise Coates, the company’s founder and co-chief executive, remains the majority shareholder with about 50% of the shares. She’s known as one of Britain’s wealthiest women and has long been one of the country’s highest-paid executives. For the year ending March 2024, she received a salary of £94.7 million plus dividends of approximately £64 million, though this represented a significant pay cut from previous years.
The company has been expanding its presence in the United States, securing licenses in 13 states. However, there have also been reports that the Coates family has been exploring options for the business, including a potential sale valued at around £9 billion.
The Industry’s Response: Calling It a Hammer Blow
bet365 isn’t alone in feeling the pressure. The entire UK gambling sector is scrambling to figure out how to adapt. Grainne Hurst, CEO of the Betting and Gaming Council, has described the tax increases as a devastating hammer blow to the industry.
The concerns are multifaceted. Operators worry that they’ll need to cut costs across the board, from marketing budgets to bonus offers to staffing levels. Some fear that the higher taxes will make it harder for them to compete with offshore operators who aren’t subject to UK regulation.
The government itself has acknowledged these risks. Official projections suggest that behavioural changes could reduce the expected tax revenue by about a third, as customers either gamble less or shift to unregulated platforms. The Office for Budget Responsibility estimated that operators might pass up to 90% of the additional duty on to players, which would reduce demand and lower the expected yield by hundreds of millions of pounds by 2029-30.
Flutter Entertainment, which operates major UK brands including Paddy Power, Betfair, and Sky Betting & Gaming, estimated that the tax changes would hit their profitability hard. Before any cost-cutting measures, the company calculated an adjusted EBITDA impact of hundreds of millions of dollars in 2026 and again in 2027.
Entain, another major operator running Ladbrokes, Coral, and other brands, also warned of significant impacts. Its leadership called the budget a disaster for British betting and gaming and for British customers, warning that the only clear winner from such policies would be the black market.
What Other Countries Are Doing
How do these tax rates compare internationally? The UK’s new 40% rate on online gaming will sit at the high end of the global spectrum for gambling taxation.
The Netherlands offers an interesting case study. Dutch gambling taxes have been rising steadily, reaching 34.2% in 2025 with plans to hit 37.8% in 2026. But the results haven’t been what the government hoped for. Tax receipts have actually fallen as licensed operators lose market share to offshore sites. The channeling rate, which measures how much gambling activity stays within the regulated market, has dropped significantly, raising alarms among policymakers.
In Germany, the approach is different but equally controversial. Rather than taxing profits, Germany taxes turnover at 5.3% on slots and poker. Every euro wagered faces this levy, regardless of whether players win or lose. Industry groups argue this has pushed significant activity into the black market and has made it harder for licensed operators to offer competitive products.
The Czech Republic recently increased its gambling tax from 23% to 30% for most products, though online slots face an even higher 35% rate. These increases came alongside comprehensive new player protection measures, testing whether operators can absorb both higher taxes and stricter regulations simultaneously.
Italy, Europe’s second-largest online gambling market after the UK, charges 25.5% on online casino, bingo, and poker. France and Sweden have also implemented high tax regimes, and both countries have seen considerable gambling activity migrate to unlicensed offshore operators, prompting debates about whether their tax structures strike the right balance between revenue, consumer protection, and market sustainability.
The Black Market Problem
One of the biggest fears among industry insiders is that high taxes will simply drive customers to illegal operators. A recent report commissioned by the Betting and Gaming Council suggested that about 5% of online betting and gaming in the UK now takes place on unlicensed black market sites.
The appeal of these offshore platforms is obvious. They don’t have to comply with UK regulations around customer protection, don’t pay UK taxes, and can offer more attractive odds and bonuses as a result. But they also provide no safeguards for vulnerable players, no funding for British sports, and no tax revenue for the Treasury.
Industry leaders warn that Britain could end up resembling markets like France or Sweden, with sizeable black markets contributing nothing in tax, offering no player protection, and providing no funding for sport or the broader economy. The UK Gambling Commission has said it will maintain strong enforcement against unlicensed operators even as taxes rise, but regulators acknowledge that the internet makes it challenging to completely block offshore sites.
Looking at Australia provides another cautionary tale. New data shows Australians are losing billions to offshore gambling sites, with governments projected to lose nearly A$2 billion in tax revenue within five years if the trend continues. This experience is often cited in UK debates as a warning about how quickly regulated markets can leak activity to unlicensed competitors when the balance of tax and regulation becomes too heavy.
The Jobs Question
For Staffordshire, the most immediate concern is jobs. Sir Gavin Williamson warned that losing momentum at bet365 would reopen economic wounds the region had taken so long to heal. The city has worked hard to build a digital economy that can provide opportunities for the next generation.
Research commissioned by the Betting and Gaming Council suggests that aggressive tax increases could put tens of thousands of jobs at risk across the UK gambling sector. The sector currently contributes several billion pounds to the UK economy, pays billions in taxes, and supports well over 100,000 jobs.
Analysts worry that operators might not be able to absorb the tax impact through efficiency improvements alone. While companies are implementing various cost-saving measures, from AI powered automation to more efficient cloud infrastructure, there are limits to how much can be trimmed without cutting into the workforce and product quality.
For bet365 specifically, the company actually increased its headcount in the year to March 2024, adding over 1,500 new positions. But that hiring push happened before the new tax regime was announced. Whether the company can maintain that trajectory under significantly higher tax rates remains an open question.
What Comes Next
The first tax increase takes effect in April 2026, giving operators a little over a year to prepare. Companies are already working on their response strategies. Some are looking at reducing promotional spending and marketing budgets. Others are exploring operational efficiencies and restructuring their product offerings to prioritize higher margin products or markets with lighter tax burdens.
For bet365, the choices won’t be easy. The company has built its reputation on superior technology and customer experience. Cutting too deeply could undermine the very advantages that made it successful in the first place. But maintaining current operations under a tax rate that’s nearly double what it was will squeeze margins significantly.
The broader UK gambling market remains highly competitive. Flutter Entertainment and Entain dominate with their portfolio of well-known brands. Both companies have substantial international operations that can help cushion the UK impact. bet365, while global in reach, has a significant concentration in the UK market, potentially making it more vulnerable to these specific tax changes.
Meanwhile, American operators like DraftKings continue eyeing opportunities to expand their international presence. Some observers have speculated that the challenging UK tax environment might create acquisition openings, especially if mid sized or highly leveraged operators struggle to stay profitable.
A City Watches and Waits
Back in Stoke-on-Trent, there’s a lot riding on how this plays out. The city has spent years building an identity as more than just the place where Britain’s pottery industry used to be. The emergence of a thriving digital sector, anchored by bet365 but extending to hundreds of smaller tech companies, offered a path forward.
The ICT sector has become the engine of economic growth for the region, with faster productivity gains and better-paying jobs than most other industries. Losing that momentum would be devastating, not just for the thousands of people directly employed by bet365, but for the entire ecosystem that has grown up around it.
Sir Gavin Williamson has repeatedly driven this point home in his parliamentary remarks. The city that once employed tens of thousands in pottery and coal mining has finally found a new economic base in technology and digital services. Policies that undermine that progress risk sending the region backwards after so much effort to move forward.
The government, for its part, argues that the higher taxes on online gambling are justified by the greater harms associated with these products compared to traditional betting. Officials maintain that the revenue raised will support public finances while potentially discouraging harmful gambling behavior.
As the April 2026 deadline approaches, all eyes will be on how operators respond and whether the government’s revenue projections hold up. For the thousands of families in Staffordshire whose livelihoods depend on bet365’s success, the stakes couldn’t be higher. The tax policy debate that’s playing out in Westminster has very real consequences for communities that have already endured more than their share of economic hardship.
