GGR, NGR, or Stakes: Why the Tax Base Matters More Than the Headline Rate

Two regulators can both claim a 20% gambling tax while one takes twice as much money from the same operator, purely because of how they define the base. The headline rate is the number governments cite in press releases. The tax base is the number that determines whether a market is commercially viable. For compliance teams building multi-jurisdiction P&L models, the base is where the work begins.

This article covers four regimes where the base choice produces materially different outcomes from what the headline rate implies: the United Kingdom’s profits-based Remote Gaming Duty with its freeplay notional, France’s shift from a stakes levy to a GGR levy for online poker, Spain’s Impuesto sobre Actividades de Juego and its treatment of promotional spend, and Ontario’s conduct-and-manage model where iGaming Ontario’s 20% revenue share functions economically as an NGR charge without being legislated as one. Operators and their finance teams should have qualified tax counsel review jurisdiction-specific application before finalising models.

What GGR, NGR, and Stakes Actually Mean in Regulatory Context

Gross gaming revenue (GGR), also called gross gambling yield (GGY) in UKGC terminology, is the arithmetic output of stakes received minus prizes paid out. It is the operator’s top-line revenue before any costs are deducted. A GGR tax applies to that figure. Net gaming revenue (NGR) typically deducts bonuses, promotional credits, and sometimes payment processing costs from GGR. A tax on NGR therefore reduces the base by the cost of player acquisition. A stakes tax applies to total wagers before any prizes are returned: it is regressive relative to margin, falling far more heavily on operators running high-turnover, low-margin products like fixed-odds sports betting than on those running high-margin casino verticals.

None of these definitions is universal. Each jurisdiction specifies precisely what counts as a stake, what counts as a winning, whether bonuses are deductible, and how freeplays or promotional wagers are classified. A jurisdictional tax comparison table showing headline rates, without accompanying notes on base definitions, is operationally useless for P&L purposes.

Does the Tax Base Affect How Much an Operator Actually Pays?

Yes, materially. France’s pre-2025 online sports betting levy sat at 54.9% of GGR while France’s online poker levy sat at 0.2% of stakes. At a typical poker rake margin of 3, 5% of total stakes handled, 0.2% of stakes translated to an effective GGR burden of approximately 4, 7%, far below the sports betting rate. The same nominal rate applied to two different bases produces entirely different fiscal outcomes. The July 2025 Social Security Financing Act changed the poker base to GGR, raising the effective burden for poker operators significantly even as the stated headline rate of 10% appears modest against the sports betting rate of 59.3%.

United Kingdom: The Profits Basis and the Freeplay Trap

Remote Gaming Duty (RGD) is charged on gaming provider profits under Part 3, Chapter 3 of the Finance Act 2014, on a place-of-consumption basis. Profits are calculated as stakes received from UK persons less winnings paid out to UK persons. From 1 April 2026, the rate rose from 21% to 40% of those profits, as confirmed in the Autumn Budget 2025 policy paper published by HMRC on 26 November 2025. General Betting Duty remains at 15% for remote betting until April 2027, when a new 25% rate takes effect for remote fixed-odds bets (excluding UK horse racing, which stays at 15%).

The profits basis has one structural feature that catches operators in multi-jurisdiction planning: the freeplay notional. Under the RGD regime, the nominal stake value of a customer’s first use of any freeplay the provider offers is included in taxable profits. A no-deposit bonus spin with a £10 notional stake generates RGD liability equivalent to a real £10 stake, even though the operator funded the entire amount. For operators running large-volume acquisition campaigns with freeplay mechanics, this creates a tax cost that does not appear in a GGR-only calculation. The reform for the treatment of free plays for remote gaming, announced in the 2016 Budget, established this treatment and it has remained in force since. Finance teams must therefore model freeplay volumes separately and apply the 40% RGD rate to the notional stake exposure, not simply to net cash margins.

The profits basis does provide one structural advantage: operators with negative accounting periods carry losses forward, and the tax follows the economic reality of the operator’s position. In periods of sustained promotional investment, common in market-entry phases, a profits-basis regime means duty does not accrue on revenue that does not yet exist in economic terms. This is the opposite of what a stakes tax delivers.

You’ll pay RGD on gaming provider profits from remote gaming played by a customer who usually lives in the UK. This will include any freeplays you offer., HMRC, General Betting Duty, Pool Betting Duty and Remote Gaming Duty guidance, Finance Act 2014 framework

France: The Stakes-to-GGR Pivot and What It Cost Operators

France’s Autorité Nationale des Jeux (ANJ) regulates three online verticals: sports betting, horse racing betting, and poker. Online casino gaming is not licensed under the framework established by Law n° 2010-476 of 12 May 2010. This vertical restriction is directly relevant to the tax base discussion because France historically applied a stakes-based levy to online sports betting, a structural choice that produced an effective GGR burden far higher than comparable GGR-based regimes in the UK and Spain, and contributed to France’s channelisation rate being among the lowest in Europe.

The July 2025 Social Security Financing Act (loi de financement de la sécurité sociale) restructured the French gambling levy framework. For online sports betting, the public levies rate rose from 54.9% to 59.3% of GGR. For online poker, the change was more fundamental: the pre-existing levy of 0.2% of stakes was replaced by a 10% of GGR charge. That transition illustrates why the base matters more than the rate. At typical online poker rake margins, where GGR represents approximately 3, 5% of total stakes handled, the 0.2% of stakes levy equated to an effective GGR burden in the range of 4, 7%. Moving to 10% of GGR therefore represents a significant increase in effective burden for poker operators, despite the GGR headline rate appearing lower in absolute percentage terms than the sports betting rate.

According to SBC News reporting on the July 2025 changes, FDJ reported a €24 million gaming tax hit in Q1 2025 alone and expected a full-year 2026 impact of approximately €90 million. The same reporting confirmed that the revised Social Security Financing Act brought the online sports betting levy to 59.3% of GGR, the retail betting levy to 42.1% of GGR, and the lottery rate to 69%.

Vertical	Pre-July 2025 Base	Pre-July 2025 Rate	Post-July 2025 Base	Post-July 2025 Rate
Online sports betting	GGR	54.9%	GGR	59.3%
Retail sports betting	GGR	41.1%	GGR	42.1%
Online poker	Stakes	0.2%	GGR	10.0%
Lottery	GGR	68%	GGR	69%

France also has no licensed online casino vertical, which eliminates the higher-margin products that allow operators in other jurisdictions to cross-subsidise lower-margin sports betting. The combination of a GGR-dominant levy structure at rates approaching 60%, no casino revenue to offset costs, and strict product restrictions means the French online market carries the toughest effective fiscal environment in Europe for licensed operators. France’s channelisation rate as of 2024 was approximately 29% of online turnover, the lowest among major European markets tracked in a 2024 PwC/H2GC regulatory study, consistent with a regime where fiscal burden suppresses the licensed product’s competitiveness against unlicensed alternatives. For a full profile of ANJ licensing obligations alongside the tax framework, see the ANJ licence requirements profile.

Spain: GGR with a Specific Definition and No Bonus Relief

Spain’s Impuesto sobre Actividades de Juego (IAJ) is imposed at 20% of GGR under Article 48 of Ley 13/2011, de 27 de mayo, de regulación del juego. The DGOJ (Dirección General de Ordenación del Juego) administers the framework. The statutory definition of the tax base is precise: GGR is “the total amount wagered plus any other income that would be directly derived from the organisation or operation of the game, less the prizes paid out to players.” Operators with tax residence in Ceuta or Melilla pay a reduced rate of 10% under the same provision.

The critical operational point for finance teams is what this definition excludes. Bonus costs, player acquisition promotions, welcome offers, free bet credits, are not deductible from the IAJ base. The base is prizes actually paid out from the game event, not economic prizes inclusive of promotional winnings. An operator running a 100% welcome bonus campaign in Spain bears the full 20% IAJ on gross revenue including prizes won using bonus funds, while the bonus cost sits outside the statutory relief. This produces a structural disadvantage for heavily promotional operators relative to those running leaner acquisition models.

Spain reduced its online gambling tax from 25% to 20% of GGR in its 2018 budget, a deliberate channelisation policy intended to attract licensed operators and reduce unlicensed market share. That cut delivered results in relative terms: Spain’s 2024 channelisation rate was approximately 83% of online turnover, among the higher rates in comparable European markets according to the 2024 PwC/H2GC study. However, following the Spanish Supreme Court’s Ruling 527/2024 of April 2024, which annulled portions of Royal Decree 958/2020 on commercial communications, reinstating welcome bonuses and celebrity endorsements pending a legislative response, operators face renewed promotional pressure that increases their effective IAJ burden as bonus costs rise without corresponding base relief. The DGOJ’s enforcement record in 2024, with fines totalling approximately €142 million including thirteen very-serious-offence penalties, and approximately €111 million across 58 actions in 2025, confirms that the regulator monitors promotional compliance closely alongside tax obligations. For the full DGOJ licensing and enforcement framework, see the DGOJ licence requirements profile.

Ontario: Revenue Share as Economic Tax

Ontario’s iGaming market operates under a conduct-and-manage model in which iGaming Ontario (iGO), now a standalone Crown agency following the iGaming Ontario Act, 2024, which came into force on 12 May 2025, conducts and manages internet gaming through a commercial operating agreement with each registered operator. The AGCO registers operators under the Registrar’s Standards for Internet Gaming, iGO enters the commercial relationship that determines the fiscal split.

Under the operating agreement, iGO remits 80% of gaming revenue back to each operator. Gaming revenue is defined as wagers (stakes) minus winnings and eligible deductions. The 20% that iGO retains is its revenue share, formally a commercial arrangement rather than a statutory tax. In P&L terms it functions identically to a 20% charge on an NGR-adjacent base, because eligible deductions include items that would otherwise define the gap between gross gaming revenue and net gaming revenue in a conventional tax model. According to iGO’s audited financial statements for the year ended 31 March 2025, the Corporation’s gaming revenue was CAD $2.902 billion, with operator payments totalling CAD $2.327 billion representing the 80% share, and eligible deductions of approximately CAD $17.9 million outstanding at period end.

iGaming Ontario remits 80% of the gaming revenue deposited back to each Gaming Operator as variable compensation for the online services they provide to players as iGO’s agent, in accordance with the terms of the Operating Agreement and any related policies., iGaming Ontario Financial Statements 2024, 2025

Ontario is therefore a post-bonus NGR model in economic effect, even though its legal form is a revenue share agreement. Operators must model the iGO revenue share as the primary fiscal cost before applying any additional tax obligations at the provincial or federal level, including HST. The Canada Gaming Law 2025 overview published by Chambers &amp, Partners describes Ontario’s framework as imposing taxation at 20% of gross gaming revenue, which, while technically a simplification of the operating agreement structure, captures the economic reality that compliance officers need to plan around. The AGCO and AGLC structures differ in important ways for operators considering multi-province entry, including how each province’s GGR definition and eligible-deductions framework operates, see the AGCO vs AGLC key differences comparison for a side-by-side breakdown.

Does the Tax Base Affect Bonus Strategy?

The tax base has a direct and measurable effect on how operators structure player bonusing in each jurisdiction.

Under a profits basis like RGD in the UK, an operator that pays out more in winnings reduces its taxable base in real time. The freeplay notional complicates this by adding back the nominal freeplay stake, but the underlying economic logic is that costs flow through the base. A bonus that drives genuine player winnings reduces the profits figure against which 40% is applied.

Under a GGR basis like Spain’s IAJ or France’s sports betting levy, bonuses do not reduce the tax base. The IAJ base is prizes paid from the game outcome, not marketing costs structured as credits. An operator spending 30% of GGR on bonuses in Spain pays 20% IAJ on the full GGR and then absorbs the 30% bonus cost separately, producing an effective combined cost on that GGR of 50%. The same operator under RGD in the UK would pay 40% only on the margin remaining after those bonuses contributed to player winnings, a structurally different economic outcome even at a nominally higher rate.

Under a stakes basis, France’s pre-2025 poker model being the clearest licensed example, bonusing has almost no relationship to tax liability. The levy applies to total stakes irrespective of margin. Operators running high-volume poker rooms with extensive bonus programmes faced the same levy as operators with minimal bonusing, because the levy did not touch the GGR layer at all. This is precisely why the shift to 10% of GGR in July 2025 changed the economics of French poker fundamentally: it brought bonusing into scope as a P&L cost that now interacts with the tax base, whereas before it was entirely separate.

The Channelisation Feedback Loop

Effective tax burden, as distinct from headline rate, is among the primary determinants of licensed-market channelisation. Markets with high effective burdens on licensed operators, France being the clearest illustration, tend to have lower channelisation rates, as the competitive gap between licensed and unlicensed product narrows on price and bonus generosity. The 2024 PwC/H2GC European regulation and taxation market study tracked channelisation across European jurisdictions and found that France’s online channelisation rate of approximately 29% was the lowest of any major regulated market, while the UK at approximately 98% and Italy at approximately 96%, both operating GGR or profits-based regimes at lower effective rates, maintained the highest.

For regulators, this creates a policy tension: a stakes-based or very high GGR-rate levy maximises revenue per unit of regulated activity but reduces the share of total market activity flowing through licensed channels. For compliance professionals advising operators, markets with high effective burdens require a more conservative market-entry model, lower initial promotional spend, and longer payback horizons than headline rate comparisons suggest.

How the Four Regimes Compare

Jurisdiction	Tax / Charge	Base	Headline Rate	Bonus Deductible?	Freeplay Treatment
UK (remote gaming)	Remote Gaming Duty	Profits (stakes minus winnings)	40% (from 1 Apr 2026)	Indirectly, via profits reduction	Notional first-use stake taxable
UK (remote betting)	General Betting Duty	Profits (stakes minus winnings)	15% (25% from Apr 2027)	Indirectly, via profits reduction	Free bets: first-use notional taxable
France (sports betting)	Public levy (ANJ/LFSS)	GGR	59.3% (post-Jul 2025)	No	N/A, GGR base
France (online poker)	Public levy (ANJ/LFSS)	GGR (post-Jul 2025)	10% (post-Jul 2025)	No	N/A, GGR base
Spain (online)	IAJ (Law 13/2011, Art. 48)	GGR (stakes minus prizes)	20% (10% Ceuta/Melilla)	No	N/A, GGR base
Ontario (iGO share)	Revenue share (Operating Agreement)	Gaming revenue (wagers minus winnings and eligible deductions)	20% to iGO	Via eligible deductions	Promotional wagers excluded from wager base

What Compliance Teams Must Track

The practical compliance obligation is not just to know the headline rate. It is to maintain a real-time record of taxable transactions that accurately reflects each jurisdiction’s base definition. For UK licensees, HMRC requires quarterly RGD returns under the General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 (SI 2014/2912), due within 30 days of each accounting period end. Freeplay exposure must be tracked at the player account level to compute the notional stake. The UKGC uses the term GGY in its own supervision context, and operators must ensure their internal reporting systems do not conflate the regulatory metric (GGY, for UKGC monitoring) with the tax metric (profits, for HMRC returns).

For operators licensed in France by the ANJ, the shift to GGR-based poker taxation from July 2025 requires a systems update. The legacy data capture for poker was structured around rake volume (stakes), not rake revenue (GGR), because the previous tax base demanded it. Post-July 2025, the declaration must reflect GGR at the product level. Operators who have not yet reconciled their reporting infrastructure to the new base definition risk underpayment or miscalculation, even if they have correctly noted the rate change.

For Spanish operators regulated by the DGOJ, the IAJ base of total stakes minus prizes must be reported quarterly. Finance teams must not attempt to reduce the declared base by netting off promotional costs. The statutory definition under Law 13/2011, Article 48, is explicit: the base is the economic outcome of the game event, not the operator’s economic margin after promotional expenditure. Operators entering Spain who have modelled an NGR tax should rerun their projections using a GGR base before the licensing decision is finalised.

For Ontario registrants, the iGO operating agreement is the primary document governing the 80/20 revenue split and the definition of eligible deductions. The iGaming Ontario Act, 2024, which made iGO a standalone agency from 12 May 2025, did not change the underlying commercial structure of the operating agreement, but it clarified that iGO now operates independently of the AGCO. Operators should distinguish between their AGCO regulatory obligations under the Registrar’s Standards for Internet Gaming and their iGO commercial obligations, which determine the actual fiscal cost of operating in Ontario. Ontario’s three-year enforcement record demonstrates that regulators treat these as distinct compliance streams, and a failure in one does not excuse a failure in the other.

Operators building multi-jurisdiction tax models should structure their analysis by base type first, then by rate. A profits-basis jurisdiction, a GGR-basis jurisdiction, and a stakes-basis jurisdiction require entirely different data architectures, different accounting treatments, and different bonus strategy frameworks. Grouping them by headline rate produces models that do not reflect the actual fiscal exposure. The France poker example, where the same product moved from an effective 4, 7% of GGR burden to 10% of GGR by changing the base definition from stakes to GGR, is the clearest recent demonstration of why the base is the more operationally significant variable. The UKGC vs MGA licence cost comparison provides a related model for how tax and levy structures interact with total compliance cost across two major European regimes.

Key Resources

United Kingdom: Finance Act 2014, Part 3, Chapter 3 (Remote Gaming Duty); HMRC Policy Paper, Changes to Gambling Duties (Autumn Budget 2025, published 26 November 2025); General Betting, Pool Betting and Remote Gaming Duties (Returns, Payments, Information and Records) Regulations 2014 (SI 2014/2912).

France: Loi n° 2010-476 du 12 mai 2010 relative à l’ouverture à la concurrence et à la régulation du secteur des jeux d’argent et de hasard en ligne, Loi de financement de la sécurité sociale, July 2025 amendments, ANJ, Bilan économique 2025 (Annual Market Review), published April 2026.

Spain: Ley 13/2011, de 27 de mayo, de regulación del juego, Article 48 (Impuesto sobre Actividades de Juego); ICLG Gambling Laws and Regulations Report 2026, Spain, Chambers Global Practice Guide, Gaming Law 2025, Spain.

Ontario: iGaming Ontario Act, 2024 (Schedule 9 of Bill 216, in force 12 May 2025); iGaming Ontario Operating Agreement, iGaming Ontario Annual Report and Financial Statements 2024, 2025, AGCO Registrar’s Standards for Internet Gaming.