UK Gambling Tax Hike Enters Next Phase as Operators Brace for Long-Term Impact

Published on 19th May 2026 by pods_ato_1

UK Gambling Tax Hike Enters a New Phase

Six weeks after the UK doubled Remote Gaming Duty from 21% to 40%, the gambling industry is beginning to realise the real damage may not arrive all at once. So far, the sector looks bruised rather than broken, but executives and analysts believe the hardest part is still to come.

Major operators, including Entain and Evoke have acknowledged the pressure caused by the tax increase while insisting trading remains relatively stable. FDJ has already reported weaker UK revenue, but there has been no immediate industry-wide collapse, as many feared when the changes were announced.

Instead, experts say the industry is entering a slower adjustment period where operators gradually reshape products, bonuses and customer economics to offset the massive jump in tax costs.

Operators Prepare for Long-Term Margin Pressure

According to legal and regulatory specialists, the real impact of the tax rise will become clearer over the next several quarters rather than within the first few weeks. Operators are still working through accounting cycles while attempting to soften the blow through reduced marketing spend, lower promotional generosity and internal cost cutting, including simpler promotions and tighter bonus structures following the UK’s new wagering rules.

Chris Elliott, partner at Wiggin, said the key issue is what happens once operators begin reassessing customer acquisition costs, product investment and bonusing strategies. Melanie Ellis of Northridge Law added that customer behaviour is unlikely to shift immediately because the changes are not directly customer-facing, at least not yet.

That “yet” is doing a lot of heavy lifting.

Lower RTPs Could Slowly Change Player Behaviour

One of the clearest early responses has been the reduction of slot RTPs. Vaughan Lewis of Teise Advisory explained that cutting RTP from 95% to 90% effectively doubles the expected cost of play for customers.

Players are unlikely to notice instantly. Nobody logs in and dramatically announces they’ve spotted a two percent RTP reduction like they’re solving a crime thriller. Instead, the effect builds gradually. Balances disappear faster, bonuses feel weaker, and sessions become shorter. That gradual feeling of reduced value is one reason many players say slot sessions now feel less rewarding than they used to. Eventually, customers either play less, move to a different operator or drift towards offshore alternatives.

Industry insiders believe this gradual erosion of value could become one of the biggest long-term consequences of the tax increase.

Early Signs of Market Pressure Already Emerging

While the industry has avoided outright panic, the first visible cracks are already appearing. Lottomatrix and Small Screen Casinos have exited the UK market since the tax changes took effect, while several larger operators have warned of major additional annual costs.

Evoke expects the tax hike to add between £125 million and £135 million in annual duty costs, while Playtech has warned of a sizeable EBITDA impact before mitigation measures are introduced.

The pressure is also fuelling concerns around consolidation. Larger operators with international reach are expected to absorb the costs more comfortably, while smaller casino-focused brands may struggle to compete in a market becoming increasingly expensive to operate within.

Black Market Concerns Continue to Grow

For many within the industry, the biggest threat is not taxation itself but what happens when customers decide regulated gambling no longer feels worthwhile.

The UK market is already dealing with tighter regulations, affordability checks and increasing friction around player activity. Combined with reduced bonuses and lower RTPs, critics fear licensed operators may become far less attractive compared to offshore sites offering bigger promotions, faster gameplay and fewer restrictions.

Dan Waugh of Regulus Partners warned there will eventually be a “tipping point” where excessive taxation and regulation destabilise the licensed market. Others believe that tipping point may already have arrived.

The Netherlands is often mentioned as a warning sign, where tighter regulation and higher taxes coincided with falling channelisation rates and increased offshore activity. Industry figures fear Britain could be heading down the same road.

Affordability Checks Add Another Layer of Tension

The Gambling Commission’s financial risk assessment programme continues to divide opinion across the industry, especially as racing bodies and betting operators continue pushing back against the wider rollout plans. Regulators argue the pilot scheme shows checks can be carried out with minimal disruption, but critics claim the tests failed to answer bigger questions surrounding data accuracy, consent and long-term behavioural impact.

Operators remain deeply concerned about how affordability checks will interact with rising taxes and worsening customer value. For many, it is not one individual policy causing concern but the cumulative effect of everything happening at once.

The Real Test Is Still to Come

Despite the growing pressure, the UK remains one of the most desirable regulated gambling markets globally, with overseas operators still pursuing licences. But beneath the surface, confidence is clearly weakening.

The gambling tax hike has not triggered an instant crisis. Instead, it has started something quieter and potentially more damaging: a slow restructuring of the UK market where operators cut value, customers become frustrated, and the gap between regulated and unregulated gambling continues to widen.

The real question now is not whether the industry can survive the tax rise. It is how much of the market changes before customers finally notice what has disappeared.