The UK Doubled Its Online Gambling Tax and the Big Operators Barely Blinked — Analysts Still See a 12% Drop Coming

August 19, 2026

A Regulus analysis found the UK's six biggest operators posted modest Q2 growth despite the remote gaming duty jumping from 21% to 40%. But Betfred is closing 130+ shops, racing sponsorships are being cancelled, and analysts still forecast a 12% market contraction in 2027.

Britain nearly doubled the tax on online gambling and, six months later, the industry's biggest names are still posting growth. That is the headline from a fresh Regulus analysis — and it comes with a warning attached. The firms that matter have absorbed the hit without pushing it onto players, but analysts are not calling the market healthy. They are calling it slow to show its wounds, and they still expect it to shrink by around 12% in 2027.

A tax rise almost nobody expected the sector to shrug off

When the remote gaming duty went from 21% to 40%, the industry's own forecast was grim. Doubling the tax on every pound of online gaming revenue, operators argued, would leave them no choice but to pass the cost down the line — worse odds, thinner promotions, tighter payouts — and every squeeze of that kind hands customers a reason to drift toward unlicensed sites that pay no duty at all.

That is not what the second-quarter numbers show. According to Regulus, the six companies that between them control about two thirds of the British market all came through the quarter with modest growth intact. Whatever the duty did to their cost base, it did not surface in the revenue line.

What the duty actually taxes

It is worth being precise about the mechanism, because it explains why the increase bites where it does. Remote gaming duty applies to online casino-style gaming — slots and table games — and is charged on the operator's gross gaming revenue, meaning what is left after winnings are paid out rather than what customers stake.

Taxing gross win rather than turnover is the more benign of the two models, and it is why the rise did not force an immediate change to pricing in the way a turnover tax would. But the arithmetic is still severe: on every pound of gross win, the share going to the Treasury moved from roughly a fifth to two fifths. Everything an operator spends on marketing, bonuses, technology and staff now has to come out of the remaining 60p.

Why the quarter looked so calm

The explanation is less reassuring than the result. Operators largely chose not to touch their bonusing levels, so the customer-facing product stayed the same and betting habits stayed the same with it. The money to cover the tax was found elsewhere in the business.

Timing helped too. The World Cup gave the sportsbook-heavy operators — Entain and Super Group among them — a quarter of exceptional volume, while iGaming ticked along with modest gains of its own. A tournament of that size flatters any comparison it lands in.

There is a competitive logic to the restraint, too. Bonusing is the most visible thing an operator controls, and the first company to cut it hands an advantage to every rival that holds firm. That makes generosity a hard position to abandon unilaterally — and an expensive one to maintain collectively.

The bill is being paid — just not by the giants

Look past the top six and the picture changes quickly. Betfred has announced the closure of more than 130 shops across the country, a decision that puts roughly 600 jobs at risk, and the company pointed directly at the higher UK tax burden as the reason it had to restructure what it offers.

Smaller operators sit in the worst position of all. They face the same 40% duty as the market leaders without the scale, the diversified international revenue or the marketing budgets to cushion it. Regulus was explicit that the burden falls on them disproportionately.

That asymmetry is the quiet structural consequence of a flat-rate rise. A group with operations across several countries can absorb a UK-specific increase against profits earned elsewhere; a UK-only business has nowhere to spread it. Tax changes designed to be applied evenly frequently end up concentrating the market, because the largest participants are the ones best equipped to survive them.

Even the winners are trimming

Steady revenue has not meant business as usual at the top either. Entain and Bet365 have both stepped away from long-standing sponsorship deals with racing organisations, citing the new tax rules — a withdrawal felt far beyond the operators themselves, given how much British racing depends on that money.

Racing's exposure here is unusually direct. The sport draws income from betting through the levy, from media rights tied to betting coverage, and from commercial sponsorship — three streams that all ultimately depend on bookmakers having money to spend. A tax aimed at online gaming ends up landing on racecourses that never took a slots bet in their lives.

Across the sector, marketing and sponsorship budgets are being cut back. What has not happened is the wave of consolidation many predicted: operators are still competing hard rather than merging their way out of trouble.

Why the forecast stays bearish

Regulus closes its analysis with an admission that says a lot about the UK market — it is unusually hard to forecast, because its problems tend to stay hidden until they are too big to ignore. A quarter of clean results is not evidence that a tax rise of this size was painless. It is evidence that the pain has been deferred: pushed into cost cuts, closed shops, cancelled sponsorships and margins that are quietly thinning.

For players, the practical takeaway is that the promotions and bonusing you see today are being subsidised by decisions made elsewhere in these businesses. If that stops being affordable, the offers are the most likely place it will show — and the second half of the year, with no World Cup to flatter the numbers, is where we find out.

This report is based on publicly available information and reporting at the time of writing; figures and positions may change as the parties respond. Gambling involves risk and isn't for everyone — please play responsibly, set your limits, and if it stops being fun, take a break.