Shares in some British betting and gaming firms rebounded late on Thursday after initial fears over increased gambling duties eased, though top firms are facing hundreds of millions of pounds in extra taxes.

Finance minister Rachel Reeves’ latest annual budget was focused on higher taxes for online gaming rather than retail gambling, citing concerns associated with the former.

“I will reform gambling taxes in response to the rise in online gambling. Remote gaming is associated with the highest levels of harm,” she said, raising remote gaming duty from 21% to 40% and online sports betting levies from 15% to 25%.

The changes hit online casinos and bookmakers including Ladbrokes owner Entain, William Hill UK and 888 owner Evoke, opens new tab and Flutter, the world’s largest online betting firm.

Berenberg estimates a 2026 burden of about 500 million pounds ($661.3 million) for Flutter and 136 million pounds for smaller Evoke. Meanwhile, Entain said it expects about 200 million pounds in additional costs.

However, overall measures were “only a little worse than expected,” J.P. Morgan analysts said.

Entain and Flutter stocks turned positive and closed trading 3.4% and 2.5% higher, respectively, helped by their U.S. presence and large retail operations. Flutter has also said its scale would help mitigate any impact.

Evoke shares fell 18.3%. With the UK making up two-thirds of its 2024 revenue, the company withdrew its medium-term guidance after the tax changes.

Reeves’ taxes were less punitive for physical gambling, with levies on retail betting and horse racing punts unchanged and bingo duty to be scrapped from April.

Berenberg analysts said tax rises could also prompt companies to cut expenses such as marketing to bolster margins.

Calls for higher taxes on the gambling sector have been made for several years, as part of efforts to tackle addiction and enforce tighter regulation.