UK Betting Operators Yet To Experience Full Tax Impact, Analysts Warn

UK betting operators have been able to shrug off the effects of tax rises for now, but the worst is still yet to come. That is the worrying verdict delivered by analysts at Regulus Partners.

The global consultancy business, which is vastly experienced across the sports and leisure sectors, is fully aware of the long-term impact of the steep UK tax hikes enforced by the government in last year’s budget. Although the tax rises don’t directly impact consumers, they have warned operators will begin to feel the squeeze more in the coming months.

A brutal economic climate

In April, remote gaming duty (RGD) paid on online casino bets almost doubled from 21% to 40% of gross gambling yield (GGY). Next April, general betting duty paid on online sports betting will climb from 15% to 25%, but horseracing will be exempt.

So far, there has been no disguising the fact that operators have had to contend with a brutal economic climate, and the tax rises have placed a serious strain.

Last month, Entain, the Ladbrokes and Coral owner, revealed it was making 500 redundancies in a cost-cutting programme, although it was adamant to point out that this wasn’t linked to the tax rises.

Meanwhile, William Hill owner Evoke has been saddled with a £1.8 billion pile, and is in the process of being acquired by Bally’s Intralot. Elsewhere, Flutter, the group behind Sky Bet, Paddy Power, and Betfair, confirmed they are in the midst of a CEO transition following a concerning set of financial results, even though UK and Ireland (UK&I) experienced a 4% uptick in revenues.

Are the financial results misleading?

To a certain extent, the Q2 financial results for some betting operators painted a distorted picture. For example, Betway owner Super Group confirmed earlier this month a 34% year-on-year (YoY) rise in UK revenues, despite this being the first quarter where there was a considerably higher RGD rate in place.

Instead, Regulus noted a variety of reasons as to why the tax rises weren’t necessarily reflected in operator results. One factor was that customer behaviour patterns in Q2 were largely defined by habits that were entrenched in previous quarters relating to the number of deposits made and bonuses collected.

In addition, Regulus pinpointed how three preceding quarters of relatively weak results for bookmakers gave consumers an extra £100 million to be used for wagering. This, it was suggested, could lead to growth of 7% if concentrated in Q2.

Furthermore, analysts flagged how big sporting events, such as the World Cup, helped betting brands attract new customers. Given the time sensitivity of them, it is much harder to judge the impact this has on overall market trends.

Putting things into perspective

UK operators have proved, to a certain extent, to be rather resilient during turbulent economic times. However, Regulus, who are expected to upgrade its gambling forecast for the country this year, have been more bearish than bullish with their 2027 projections.

Discussing the drawbacks of forecasts, Regulus said:

“We readily admit, however, that there is no clear data to back this up.

“The problem for forecasting, and more importantly for operating in the UK online gambling market, is that nothing much will happen until it does.”

It seems that the bigger effects of tax rises haven’t fully kicked in. Perhaps by Q1 of 2027, we will have a clearer understanding of how UK betting sites are faring.