Light & Wonder Warns UK Tax will Impact its Results in H2 2026

Light & Wonder has warned higher online gambling taxes in the UK will impact its growth in the second half of the year, after reporting on its first quarter where the changes began to take effect.

The supplier’s consolidated revenue went up 2% year-on-year for Q2 2026 to $828 million (£615.1 million). Net income increased 26% to $120 million and adjusted EBITDA rose by 9% to $383 million. iGaming in particular has been a standout area of strong performance by Light & Wonder, where Q2 revenue went up 14% to $92 million.

Tax will take its toll

Oliver Chow, Light & Wonder’s EVP, CFO and Treasurer, forecast mid to high single-digit consolidated AEBITDA growth in the second half of the year, and said this would be impacted by changes in UK iGaming taxes. The company expects these taxes, combined with US tariffs, to have an impact on the full year performance of about $40 million.

At the start of April, remote gaming duty in the UK, paid on online casino bets, was increased from 21% of gross gambling yield (GGY) to 40%. There will also be a rise in general betting duty, paid on online sports bets, which will go up from 15% of GGY to 25% in April 2027.

Matt Wilson, Light & Wonder President and CEO, told investors on an earnings call:

“Looking ahead, we anticipate year-over-year growth rates to moderate in the second half of the year due to the previously mentioned UK tax increases, which took effect during the quarter, and stronger comparables in the prior year.

"We expect this to be partially offset by the continued performance and launch of our 1PP proprietary games.”

Suppliers may not be as directly impacted by the tax increases as operators, as the top tier operators in the UK in particular have highlighted cuts to marketing spend as a common mitigation measure against the increases.

Suppliers do not pay taxes such as remote gaming duty themselves, but could be impacted if operators decide to make cuts on paying for online casino games provided by suppliers.

Operators starting to mitigate

This week, Flutter Entertainment, owner of Paddy Power, Betfair and Sky Bet, said its UK and Ireland revenue grew 4% for Q2, but that its performance was impacted by the increased taxation.

Flutter expects to make $200 million of additional cost savings that were announced as part of its UK gaming tax cost mitigation plans, which are expected to be delivered in 2027.

Similarly, Rank Group, owner of Grosvenor Casinos and Mecca Bingo, has been implementing mitigation factors since April 1. Rank said it has made significant savings in above-the-line marketing spend, supplier costs and headcount reductions. Performance marketing spend and customer incentives have been protected.

Following the announcement of the increases in November, Ladbrokes and Coral owner Entain said approximately 25% of the impact can be mitigated by reducing marketing and promotions as soon as the tax changes are implemented. This will equate to an EBITDA impact of approximately £100 million in 2026 and about £150 million in 2027.

Meanwhile, William Hill owner Evoke said its duty costs will increase by £125 million to £135 million per year after the tax rises are fully implemented, with about £80 million of the pre-mitigation impact arising in FY26. Evoke mentioned supplier savings as a mitigation measure.