Light & Wonder Addresses UK Uncertainties in Q3 Financial Report

Light & Wonder mentioned how UK gaming legislation changes bring risks and uncertainties to its business in its Q3 report; a quarter where UK revenue represented 15-20% of the supplier’s iGaming revenue.

Light & Wonder’s total revenue for the three months ended September 30 dropped year-on-year from $841 million (£624.8 million) to $824 million. iGaming revenue increased by $11 million to $97 million. Based on the 15-20% figure, this would mean Light & Wonder’s UK iGaming revenue for the quarter would be between £14.6 million and £19.4 million.

Market challenges

This was the second quarter in which Light & Wonder was operating in the UK amid increased remote gaming duty (RGD), paid on online casino bets. From the start of April, RGD was raised from 21% of gross gambling yield (GGY) to 40%.

Addressing its iGaming revenue increase for Q3, Light & Wonder said this was primarily driven by growth in North American markets and the expansion of its partner network, offset by increased UK tax. Light & Wonder said the RGD increase had already impacted its adjusted EBITDA margin, which decreased to 38% for the quarter from 40%.

Further tax increases

Light & Wonder will have to deal with further increased taxation in the UK in April 2027. General betting duty, paid on online sports bets, will go up from 15% of GGY to 25%; bets on horseracing will be exempt from the increase. Meanwhile, machine games duty (MGD) will go up from 20% of net takings to 25%, as announced by Chancellor John Healey in the Autumn Budget.

When listing a number of challenges the company faces, Light & Wonder wrote: “Risks and uncertainties of changes in UK gaming legislation, including any new or revised licensing and taxation regimes, responsible gambling requirements and/or sanctions on unlicensed providers.”

Speaking on an earnings call following the publishing of the results, Rohan Gallagher, Light & Wonder’s EVP, Global Chief Corporate Affairs Officer, mentioned how the UK has provided one of two international headwinds, along with Brazil. Gallagher said: “Underlying business remains strong and our market share has been resilient.”

Impact on UK retail

Since the initial announcement about tax increases in the UK from then chancellor Rachel Reeves in November 2025, a number of tier one UK operators have announced shop closures. In September, Flutter Entertainment confirmed up to 100 of its Paddy Power shops are “under review”, with approximately 400 jobs being at risk of redundancy.

In April, William Hill owner Evoke confirmed it would be closing 270 of its shops, representing about 15% of its retail estate. Meanwhile, Betfred announced in July plans to close 132 of its shops and reduce its workforce by more than 600 employees.

In August, industry trade body the Betting and Gaming Council said 540 high-street betting shops have closed and around 4,500 jobs have been lost since last year’s Autumn Budget was announced. It is currently unclear if the MGD increase will have a further impact on shop closure numbers.

UK SSBT orders removed

Oliver Chow, Light & Wonder’s EVP, CFO and Treasurer mentioned how there has been a drop in orders for self-service betting terminals (SSBTs) in the UK, which potentially outlines the challenges in the UK retail market. Chow said: “There were about 2,000 units in the UK last year, SSBT orders, that aren’t going to repeat themselves this year.”