Hammond told parliament he plans to increase the so-called Remote Gaming Duty paid by overseas operators who offer online casino-type games such as blackjack to 21 percent from its current level of 15 percent.

"I can confirm that we will increase Remote Gaming Duty on online games of chance, to 21 percent in order to fund the loss of revenue as we reduce FOBT stakes to 2 pounds," Hammond told parliament.

(Reporting By Andrew MacAskill; editing by Michael Holden)