“The problem for forecasting, and more importantly for operating in the UK online gambling market, is that nothing much will happen until everything does,” analysts said
UK-licensed online gambling operators have so far shrugged off the hit of April’s doubling of Remote Gaming Duty, with Q2 gaming growth remaining strong, but analysts at Regulus Partners have warned that the bigger effects may still be to come.
In recent weeks, leading names such as Entain, evoke and Super Group have posted UK growth for Q2 and H1. This was despite Remote Gaming Duty increasing from 21% to 40% from 1 April.
Regulus’ analysis of six major online gambling operators, representing around 66% of UK market revenue, found that online betting was broadly flat in Q2, while online gaming continued to grow by around 12%.
The impact of the tax increase was therefore “not remotely discernible” in the Q2 figures, according to Regulus. However, analysts added that they were “not surprised” by this.
Why the tax rise has yet to bite
Regulus identified six reasons why the impact of the tax rise has yet to become apparent in operator results.
Most importantly, analysts said customer behaviour in Q2 was largely shaped by activity in preceding quarters, with deposits made, bonuses collected and habits already established. As the tax does not fall directly on consumers, there was little reason for player behaviour to change suddenly.
Regulus also flagged how three preceding quarters of relatively weak betting results for bookmakers gave consumers around £100m of extra money to recycle into gaming. This, analyst said, contributed up to 7% growth if concentrated in Q2.
Meanwhile, Regulus said many operators have so far protected bonusing levels while looking to cut other costs. However, analysts believe this approach will “not be sustainable” as the cost of bonusing rises and other opportunities for savings are exhausted. Analysts warned this could eventually lead to negative revenue outcomes.
Another point from Regulus was that operators have little incentive to scale back while competitors continue to see opportunities in the market. This, the firm said, has so far prevented the expected consolidation and instead maintained a more competitive environment.
Analysts also referenced the World Cup in helping betting-led brands attract customers – but said only Entain and Super Group benefited materially. On this, Regulus cautioned that major sports events are difficult to identify in longer-term data as their broad appeal and limited number of events mean they have relatively little impact on overall market trends.
Finally, Regulus said the largest and most visible operators have the strongest brands and therefore lower relative bonusing costs. As a result, the tax rise is expected to have its greatest impact on smaller operators. These account for around 33% of the UK market but are largely absent from headline results reported by major operators.
Regulus: ‘Nothing much will happen until everything does’
Despite the resilience seen in Q2, Regulus fully expects the tax increase to hit home soon for operators. Analysts said that the impact will become more apparent in H2 of this year and, particularly, in H1 2027.
Regulus is likely to upgrade its forecast for UK gambling during 2026, but largely at the expense of betting. It added that it will maintain a “bearish” outlook for 2027, including a forecasted 12% decline in gaming.
“We readily admit, however, that there is not yet any clear data to back this up,” Regulus said. “The problem for forecasting, and more importantly for operating in the UK online gambling market, is that nothing much will happen until everything does.”