The gambling industry in the U.K. is grappling with difficult decisions due to recent tax increases. Operators like Betfred are feeling the financial strain, while strategies for offshore structuring are already being implemented.
In March, Fred Done discreetly relocated his property business to Jersey, just days before U.K. Chancellor Rachel Reeves eliminated the inheritance tax exemption for family-owned enterprises. Although this move didn’t attract significant media attention, it is not unusual for billionaires to reorganize their estates in anticipation of tax changes.
However, this decision holds particular importance for the gambling sector. Done and his brother Peter contributed £400 million in taxes last year, with half of that amount stemming from gambling duties associated with their Betfred operations, making them the largest individual taxpayers in the U.K. for 2025.
This offshore restructuring underscores how tax changes can shape strategic choices for major business owners, especially for firms like Betfred that have considerable exposure in the U.K. While Done's restructuring pertains to his property interests rather than Betfred's gambling activities, it coincides with a more stringent tax landscape for online gambling in the U.K.
Legal experts informed The Telegraph that Done’s move to Jersey, which places ultimate ownership under a trust, could potentially save millions in inheritance tax. Additionally, industry analysts have highlighted offshore corporate structures as a viable method for operators to alleviate increasing tax pressures, especially in online sectors.
Betfred is not the first significant operator in the U.K. to relocate some operations offshore for tax benefits. Sky Bet, owned by Flutter Entertainment, established a new entity, SBG Sports Limited, in Malta and began transferring its commercial and marketing operations there in late 2025.
Tax Policy Associates analysts estimate that this shift could save Sky Bet around £55 million annually in U.K. taxes, thanks to differences in VAT treatment for marketing expenses and reduced corporation tax liabilities for certain operations.
While Flutter maintains that the relocation was driven by operational efficiency and that Sky Bet will continue to pay U.K. corporation tax on its profits, skeptics remain unconvinced. Former Prime Minister Gordon Brown has urged the Treasury Select Committee to investigate, and Tax Policy Associates analyst Dan Neidle has labeled the VAT arrangement as “improper,” a claim that Flutter disputes.
When Liberal Democrat leader Ed Davey questioned Prime Minister Keir Starmer about government action to prevent gambling companies from shifting profits offshore, Starmer did not provide a response.
U.K.-facing gambling brands can shift their commercial operations to lower-tax jurisdictions like Malta, Gibraltar, or Jersey while still maintaining a presence for consumers in Britain.
Sky Bet’s marketing expenditure for 2024 was £135 million, and Betfred operates on a similar scale. At this level, even minor differences in tax treatment can lead to significant savings.
Since Sky Bet's relocation, the tax environment has tightened further. Chancellor Reeves’ autumn budget will raise the Remote Gaming Duty on online casino games from 21% to 40%, effective April 2026, and increase the online sports betting duty from 15% to 25% starting April 2027. These changes are expected to generate over £1 billion annually by 2031.
For operators, these tax adjustments will significantly impact online profit margins, especially in casino products where tax rates have nearly doubled. Flutter has indicated that it anticipates a pre-mitigation impact of approximately £230 million on its earnings in 2026 due to these changes, with that figure expected to rise to £540 million in 2027.
Kevin Harrington, Flutter’s CEO for the U.K. and Ireland, remarked that the “U.K.’s remote gaming duty is now ab...”