UK Online Gambling Market Shrugs Off Remote Gaming Duty Hike — For Now, Says Regulus Partners
A Regulus Partners analysis finds UK online gambling operators have weathered April's Remote Gaming Duty hike to 40% so far, but warns the bigger financial impact may still be ahead.
UK-licensed online gambling operators have largely absorbed the shock of April’s doubling of Remote Gaming Duty, with second-quarter online gaming growth holding up better than many in the industry expected, according to new analysis from consultant group Regulus Partners. But the firm cautions that the full weight of the tax hike may still be working its way through the market.
Remote Gaming Duty, the levy charged on gross gaming revenue from online casino, slots, and similar remote gaming products, jumped from 21% to 40% on April 1, one of the largest single tax increases the UK gambling sector has ever faced. Regulus Partners reviewed six major online operators representing roughly 66% of total UK market revenue and found that online betting was broadly flat in the second quarter, while online gaming revenue continued growing at around 12%.
How the Big Operators Have Reported the Hit So Far
Recent earnings from industry heavyweights back up the “shrugged off, for now” framing. Entain posted first-half net gaming revenue up 5% in constant currency, even as underlying EBITDA fell 2%, with the company noting that H1 only reflected one full quarter under the new 40% rate. Evoke, the parent of William Hill, 888, and Mr Green, reported flat group revenue for the first half alongside a 10% drop in adjusted EBITDA, with gaming duty costs rising to £233.4 million from £187 million a year earlier. Rank Group, meanwhile, said its digital operating profit actually rose 8% despite the higher duty, while Flutter Entertainment swung to a quarterly loss partly tied to the new tax environment.
Ahead of the change, Entain had estimated an annualised hit of roughly £200 million to its UK and Ireland online business before mitigation, while Evoke pegged its own annualised cost increase at £125-135 million. Both companies said they expected to offset a meaningful chunk of that impact through reduced marketing spend and leaner promotional offers rather than passing the full cost straight to bettors.
Why Analysts Say the Bigger Test Is Still to Come
Regulus Partners’ caution centers on timing. Because the 40% rate only applies to accounting periods beginning on or after April 1, most operators’ first-half results captured just one quarter under the new regime, meaning the true annualised effect on margins, promotions, and player value won’t be fully visible until later reporting periods. There’s also a second tax change already on the calendar: a new 25% Remote Betting Rate within General Betting Duty is set to take effect in April 2027, up from 15%, which will squeeze online sports betting margins in a way this year’s changes have not.
Industry watchers have also flagged a longer-term risk that goes beyond any single operator’s balance sheet: as licensed operators trim bonuses and adjust odds to protect margin, some bettors could drift toward unlicensed offshore sites that aren’t subject to UK duty at all, a dynamic sometimes described as a “spiral effect” for the regulated market. For now, though, the biggest UK-facing operators appear to be managing the transition, leaning on cost mitigation and continued online gaming growth to keep the April tax hike from derailing their numbers.