The tax hike – which applies to online casino games such as poker and blackjack – is to help pay for a crackdown on fixed odds betting terminals (FOTBs).
The tax will increase from 15 per cent to 21 per cent from October next year.
The Government plans to use the money raised from the hike to offset the cost of reducing the maximum stakes for fixed odds betting terminals (FOTBs) from £100 to just £2 from October 2019.
Ministers have blasted the machines as a "social blight" that prey on the most "vulnerable in society".
A tax hike to pay for the cost of reducing the maximum stakes was expected but critics say the 6 per cent increase was higher than predicted.
Some experts predict it could force some gaming companies out of the UK market.
Richard Williams, licensing, gaming and regulatory partner at London law firm Joelson, told Gambling Insider: “Whilst there had been speculation in the press that the Chancellor would increase the rate of remote gaming duty (RGD) from 15 per cent, the announcement that it will increase to 21 per cent will come as a shock.
“Although a rate of 20 per cent was unwelcome, it would have been manageable.
"Whilst this is only 1 per cent higher than was widely expected, the increase to a figure of 21 per cent may leave some operators questioning whether it is worth continuing to operate in Great Britain, given the current fiscal and regulatory environment.”
The Sun has put together a guide to the winners and losers of this year's Budget to help you find out what the policies mean for you.
Meanwhile we've also put together a guide to stamp duty after it was announced that househunters looking to snap up a home must pay stamp duty on properties priced at more than £125,000.
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