New tax rises are forcing hard choices across the U.K. gambling industry. For operators such as Betfred, the financial impact is becoming more pronounced, while precedents for offshore structuring are already in place.
When Fred Done quietly moved his property group to Jersey in March, less than two weeks before U.K. Chancellor Rachel Reeves removed the inheritance tax exemption for family-owned businesses, it didn’t generate many headlines. A billionaire restructuring his estate ahead of a tax change is not unprecedented.
However, for Britain’s gambling industry, the decision carries a different significance. Done and his brother Peter paid £400 million in tax last year, half of it gambling duty from their Betfred empire. That made them the biggest individual U.K. taxpayers in 2025.
The offshore restructuring highlights how changes in the tax environment can influence strategic decisions among major business owners, particularly for companies with significant U.K. exposure such as Betfred.
While the restructuring relates to Done’s property interests rather than Betfred’s gambling operations, it comes as the U.K.’s tax environment for online gambling is becoming significantly more demanding.
Lawyers told The Telegraph that Done’s Jersey restructuring, which places ultimate ownership under a trust, could save tens of millions in inheritance tax alone. Separately, industry analysts have pointed to offshore corporate structures as one way operators can mitigate rising tax burdens, particularly in online segments.
An Existing Blueprint
Betfred wouldn’t be the first major Britain-facing operator to move some of its operations offshore for tax reasons. Sky Bet, owned by Flutter Entertainment, created a new entity, SBG Sports Limited, in Malta. In late 2025, it began moving its commercial and marketing functions there.
Analysts at Tax Policy Associates believe that this move could save Sky Bet about £55 million in U.K. tax annually. These savings are linked to differences in VAT treatment on marketing expenditure and a reduced U.K. corporation tax exposure on certain functions.
Flutter insisted that the relocation was a result of operational efficiency and that Sky Bet would continue paying U.K. corporation tax on its profits. However, critics were unconvinced.
Former Prime Minister Gordon Brown called on the Treasury Select Committee to investigate. Meanwhile, Tax Policy Associates analyst Dan Neidle described the VAT arrangement as “improper” — a characterization Flutter disputes.
When Liberal Democrat leader Ed Davey asked Prime Minister Keir Starmer whether the government would act to stop gambling companies moving profits offshore, Starmer didn’t respond.
A U.K.-facing gambling brand can move its commercial infrastructure to a lower-tax jurisdiction, such as Malta, Gibraltar, or Jersey, while still maintaining a consumer-facing presence in Britain.
Sky Bet’s marketing spend in 2024 was £135 million, and Betfred is a comparably sized operator. At that scale, even relatively small percentage differences in tax treatment can translate into substantial cost savings.
The Numbers Drive the Calculation
What has changed since Sky Bet made its move is that the tax environment has become more demanding. Reeves’ autumn budget raises Remote Gaming Duty on online casino games from 21% to 40%, effective April 2026.
It also increased the online sports betting duty from 15% to 25% from April 2027. The Chancellor projects that these changes will generate more than £1 billion per year by 2031.
For operators, these changes materially affect online margins, particularly in casino products where tax rates have nearly doubled.
Flutter provides insight into what operators can expect. It projected a pre-mitigation hit of about £230 million to its earnings in 2026 due to the changes. In 2027, that figure would rise to £540 million.
Flutter’s U.K. and Ireland chief executive, Kevin Harrington, said that the “U.K.’s remote gaming duty is now above countries such as the Netherlands, where a recent tax increase saw a rise in illegal gambling and a fall in government receipts.”
The scale of these projected impacts highlights the pressure on operators with significant exposure to the U.K. market.
Done’s Warning
Fred Done has spent the past year arguing that taxing U.K.-related operators out of existence will drive customers to unregulated offshore alternatives.
He told the BBC in October that there are “plenty of bookmakers offshore who happen to take the bets, who don’t pay anything to this country.”
Betfred chief executive Joanne Whittaker said she was “stupid and naive” to think that the company’s high street betting shops would be protected from tax rises. She said that there are “people in the Treasury who don’t understand our business.”
Betfred has about 1,273 U.K. betting shops, which cannot relocate offshore. Done warned that 300 of these stores were loss-making before the budget. He added that a tax rise could make the entire retail operation unviable. He said that there could potentially be 7,500 job losses if that were the case.
Britain’s high street betting sector is already in decline, falling from almost 10,000 shops in 2017 to about 6,668 today. While U.K. lawmakers didn’t increase tax on retail operations, operators are already using revenues from online operations to keep loss-making retail operations afloat.
As retail declines and online becomes a larger share of operator revenues, the profitability of digital operations is becoming increasingly important within the current tax framework.
Featured Image: Mtaylor848 via Wikimedia Commons (license)
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