Today’s the day. As of 1 April 2026, the UK gambling industry will be subject to a 40% Remote Gaming Duty (RGD), paid on online gaming, a near doubling from the rate of 21% in place since 2019.
Industry stakeholders and observers view that 2026 is going to be a defining year for the UK gambling industry, changing all dynamics of the sector including its structure, sustainability and competitive make-up.
The stakes have never been higher for UK gambling licences … but what should we expect?
More cuts to marketing
As soon as Rachel Reeves, Chancellor of the Exchequer, announced the new tax regime on 26 November, operators warned that marketing cutbacks were likely.
A predictable outcome, as marketing cuts are recognised as an immediate action to protect budgets and operating margins. In the immediate aftermath of the budget, major PLCs Flutter Entertainment, evoke and Entain all said their marketing budgets would shrink in 2026. A commonly touted figure is a spend reduction of between 20%-25%.
This process has already begun, with horse racing sponsorships being the first victim – perhaps indicative of some resentment betting has towards racing? The sport went its own way during lobbying against tax raises with the #AxeTheRacingTax campaign last year.
So far, Entain’s Ladbrokes has cut its sponsorship of the Coral Cup, a Cheltenham Festival fixture which has carried the bookmaker’s branding since its inception in 1993. BetMGM and bet365 have also cut sponsorships, and traditionally horse racing-focused brands like BetGoodwin have stated that they will have to focus elsewhere.
Beyond racing, the most notable example of marketing cutbacks has been at Flutter’s Paddy Power. Emails seen by SBC last week revealed a restructuring of Paddy Power’s marketing teams across retail, brand and content, with redundancies confirmed. This is likely a sign of things to come.
On the topic of restructuring…
Restructuring is not just going to hit marketing teams, however. In some cases, restructurings are going to take place across entire groups, and in a macro sense across the entire market.
William Hill-owner evoke has been in the midst of a strategic review since December. This includes the potential sale of the group, or of one or all of its assets to different buyers.
If William Hill was to be sold, this would mark the third sale for the business in the past five years, having been sold to Caesars Entertainment in 2021, which subsequently sold the international business to evoke in 2022.
Aside from evoke, there have also been sale rumours around bet365 over the past year, with the Coates family reportedly holding talks with Wall Street banks over a multi-billion buyout in early 2025. Could the UK tax hikes prompt the Coates to finally pull the trigger?
Rob Coldrake, Flutter’s Chief Financial Officer, told investors that all UK savings were being assessed, in which leadership anticipates a home market’s EBITDA impact of $320m on FY2026 accounts. Cost savings options are being reviewed to minimise this hit below $300m mark.
And finally, regarding the wider UK market, a restructure is inevitable. Some firms will not be able to withstand the pressure and will be forced to withdraw, as the likes of LiveScore did in the Netherlands in the aftermath of that country’s tax hikes.
Some companies – from Flutter to Entain to Smarkets – have expressed confidence that they will be able to secure more market share as other firms bow out of the market. This will be a fiercely competitive process, however, and not everyone will make it through to the other side.
A knock on effect on retail and racing?
Today’s RGD increase will not directly affect retail betting. Neither will it affect horse racing, which celebrated the success of its #AxeTheRacingTax campaign when it was excluded from any direct tax raises last November.
Retail betting will not be directly affected by the increase in General Betting Duty (GBD) next year either, which has been tailored to only hit remote betting. It seems the government may have listened with the likes of Betfred and taken to the UK media to warn of imminent shop closures last year.
However, retail may still find itself the victim of the wider market restructuring as operators look to cut costs elsewhere, accelerating the decline of a retail sector in which many shops have been struggling to turn a profit for years.
Tax raises will add yet another burden to this sector, one which was hit hard by increases in National insurance and minimum wage in previous budgets, as Joanne Whittaker, Betfred CEO, told SBC News last year. Increases in business rates are also having a deep impact on hospitality in general, and retail betting is no exception.
An uncertain world
The first phase of tax adjustments for UK gambling licences comes against a backdrop of compounding global economic shocks, likely to intensify amid the ongoing Middle East conflict and its impact on global energy markets.
UK households face rising energy bills, renewed inflationary instability, currency volatility and the prospect of higher interest rates.
Amid what the Treasury had described as“Britain facing an uncertain world”, the Bank of England and Chancellor Rachel Reeves maintain that the UK economy can sustain growth of around 0.7% in 2026.
London equities have softened in recent weeks, with the FTSE 100 slipping by around 2–4% over the past month as global volatility and looming energy shocks weigh on investor sentiment.
Gambling PLCs cannot hide from global shocks, with macro pressures to cut through to both consumer spend and market valuations. The grim backdrop is likely to impact the M&A condition of UK gambling, as private investors demand cost controls to maximise profits and margins.
The impact is also being felt beyond Britain’s shores. The overseas territory of Gibraltar, for example, put its foot to the floor with a long-awaited legislative overhaul last year, and the tax situation in the UK has been cited as a specific reason for this.
A return to stability in 2028?
The financial impact of the tax raises will be deep, that much is certain. Flutter projected the aforementioned $320m hit to EBITDA in 2026 and a $540m hit in 2027. This was reiterated by Kevin Harrington, the firm’s UK&I Chief Executive Officer, on a recent business post podcast appearance.
Entain, meanwhile, expects an impact of around £100m on annual EBITDA, equating to around 8% of the expected EBITDA figure for 2026. It expects a further hit of £150m in 2027, and questions around UK tax have dominated its quarterly earnings calls since November.
The government is, understandably, expecting to cash in for the tax hikes. HM Treasury expects £1.6bn in tax revenue, which will be used to subsidize its slashing of the two child benefit cap, a bid to elevate the UK”s admittedly embarrassingly high rates of childhood poverty.
Even this figure has its detractors, however. In its assessment of the November budget, the Office for Budget Responsibility (OBR) observed that tax intakes could be hindered by operator mitigation measures which could prompt customers to migrate to the black market.
“They’ll only get a billion, and they admit that the other £600m will be leaked to the illicit market,” Flutter’s Harrington said on the Business Post Podcast last month.
The next two years are going to be tough for this industry, there is no doubt about that. It will also be tough for adjacent industries, like horse racing, and for the charity treatment sector, which is going through its own turbulent time amid the transition to a new funding model.
For gambling PLCs, the playbook must be long-term to navigate headwinds. Once RGD is factored into accounts, most will turn to reconcile the forthcoming impact of the remote betting tax (RBT), which will increase from 15% to 25% in April 2027 — another direct hit on the bottom line.
Bluntly, 2026 could be viewed as a write-off year for UK gambling simply defined by cutbacks rather than growth. This view is too simplistic, as this period of “tax adjustments” will mark a defining test of leadership.
A longer lens suggests a saturated UK iGaming market resetting its competitive landscape by 2028, where the most disciplined and skilled incumbents will be best placed to capture new market share.
The top order of UK gambling was once considered set in concrete. Sweeping adjustments now leave everything to play for. April marks phase one of a new era — one defined by leadership under pressure, where only the fittest will navigate the UK gambling’s shake-up.
Things are going to get very interesting…