UK’s Gambling Tax Regime Forces Operators to Rethink Priorities

UK's Gambling Tax Regime Forces Operators to Rethink Priorities

The UK gambling landscape is shifting once again, this time due to a substantial reconfiguration of the tax structure affecting online operators. Chancellor Rachel Reeves' recent Autumn Budget confirmed increases that had been circulating as speculation for months. Still, the scale and timeline of the changes have prompted operators to reassess their strategies with unusual urgency. The most impactful adjustment is the increase in the online casino tax rate, which will rise from 21 per cent to 40 per cent in April 2026. A year later, taxes on online sports betting will increase from 15 per cent to 25 per cent, reshaping the financial expectations for digital operations across the sector.

These measures arrive at a moment when operators are already working within a regulatory environment shaped by ongoing reforms to affordability checks, marketing rules, and responsible gambling obligations. The new tax regime now adds another layer to that environment, prompting companies to explore cost reductions, structural changes, or new ways to position their digital operations. Retail betting shops, however, remain outside the line of fire: the tax on both over-the-counter sports bets and machine play will remain unchanged. Bingo operators also receive a notable shift with the complete removal of the 10 per cent duty on bingo revenue, and horse racing wagers will not face any new tax obligations.

The Betting and Gaming Council responded quickly after the Budget announcement, describing the move as one that will place pressure on thousands of employees and raise concerns about the competitiveness of licensed operators against those based offshore. The central argument is that higher taxes could widen the gap between regulated firms that comply with UK obligations and unlicensed operators that neither contribute to the Treasury nor follow British regulatory standards.

Among individual companies, Evoke has found itself at the centre of investor attention. The group's share price dropped sharply following the news, reflecting concerns about its reliance on online revenues. The company's leadership has already outlined mitigation plans that aim to reduce the impact by half over the medium term. These include cuts to marketing, renegotiations with suppliers, and a restructuring of its operating costs. The group had previously announced plans to withdraw the William Hill brand from several international markets, and the new tax arrangement has accelerated discussions about further retail reductions. Chief executive Per Widerström has warned that the necessary adjustments in the UK may involve significant job cuts across its operations, consistent with earlier forecasts that as many as 200 betting shops could close.

Entain, the group behind Ladbrokes and Coral, has also begun recalibrating its cost structure. It anticipates absorbing around 25 per cent of the tax impact through internal efficiencies, with the remaining portion reflected in lower earnings. The group estimates that its EBITDA will decline by about £100m in 2026 and £150m in 2027. However, chief executive Stella David has hinted that market realignment may create openings for larger operators if smaller firms find the new tax trajectory unsustainable.

Flutter, which operates Paddy Power and several other brands, has presented a similar approach. Kevin Harrington, who oversees its UK and Irish business, has stated that the company initially expects to offset roughly a fifth of the impact through cost reforms, eventually rising to around 40 per cent. Its forecasted EBITDA adjustments amount to $235m in 2026 and $339m in 2027. Harrington highlighted the company's size and existing operational structure as factors that position it to withstand these changes, though not without adjustments to marketing and promotional budgets.

For Rank Group, the consequences are mixed. Its land-based casinos under the Grosvenor brand and its Mecca bingo venues provide insulation against digital taxation pressures, and the elimination of the bingo tax is a meaningful benefit. Still, Rank projects a £46m impact on its online activities, a reminder that few operators are entirely shielded from the new framework. The upcoming rise in the national minimum wage, which climbs to £12.71 in April 2026, also adds an estimated £5.5m in additional labour costs to its bottom line. The combination of wage adjustments and digital tax changes means Rank faces a two-track shift across its digital and physical operations.

Super Group, which operates Betway and Spin, has taken a more measured stance. Its growing presence in Africa and other international markets gives it a broader geographic cushion. The company expects a 6 per cent EBITDA impact in 2026, but its leadership maintains that the changes will not disrupt long-term priorities. Chief executive Neal Menashe also introduced a recurring theme in the industry's response: that higher taxes must be accompanied by stronger enforcement against offshore competitors. Without a coordinated approach to illicit operations, licensed firms argue that rising costs will undermine both market share and consumer protections.

Suppliers are also adjusting. Playtech has reported that the updated tax framework will reduce its 2026 adjusted EBITDA by an amount in the upper tens of millions of euros before mitigation. However, the company's wide international footprint offers balance, and Playtech has expressed confidence in meeting current expectations for 2026.