UK majors and black market emerge as biggest Budget winners
Bonuses hit as UK sector reels from Budget, France budget update, Sorare, results &Co
Hello, on Gaming&Co today:
UK Budget fallout: large operators win the day, black market waits in the wings
So far so good: French tax rises unlikely for the time being
Sorare job cuts, Results: Intralot, Allwyn, OPAP
News shorts: Kambi-Penn, UAE iGaming, Robinhood, DAZN
Subscribe to Gaming&Co!
UK big boys and black market the only Budget winners
Larger firms to ‘mitigate’ against tax rises, but key worry remains black market rise as players look for more generous bonuses
Back to black: As the dust begins to settle on the UK government’s decision to sharply raise the tax burden on online gambling operators, the early winners appear to be the operators with the deepest pockets - and the black market. Chancellor Rachel Reeves went further than many were expecting during her Autumn Budget statement Wednesday, with remote gaming duty (RGD) jumping from 21% to 40% in April 2026, and with a new 25% rate (from 15% or a 67% increase) on online sports betting (excluding racing) to follow in April 2027.
While most of the industry reacted with alarm, Deutsche Bank called the package “slightly better than expected” versus pre‑Budget fears of in‑person gambling being impacted. For example, Rank faced c25% pre‑mitigation EBITDA hit, rather than the 35% previously modelled, and Entain and Evoke were “also slightly better” off, said DB.
Softening the blow: Flutter warned of an adj. EBITDA impact of roughly $320m in 2026 and $540m in 2027, but it also expects to offset around 20% of the hit in the first six months and up to 40% thereafter via “reduced operational, promotional and marketing spend”. Entain has guided to a £200m annual duty increase for UK&I online, but says it can mitigate about 25% through cuts to marketing and promotions, easing the EBITDA drag.
This flexibility, plus diversified US and retail earnings, is why larger listed groups argue they are “well placed to navigate” the hikes even as they warn of wider sector damage. Indeed, Entain marketing director Daniel Toledo predicted multi-geo operators would “actively” divert budgets away from the UK.
Fill the vacuum: Regulus Partners’ modelling underlined how that damage could play out. It estimated the 67% rise in general betting duty meant that a sportsbook giving away 20% of GGR in bonuses faced an effective tax rate of 31%, forcing generosity towards 10% and roughly halving UK betting profits before any gaming cross‑sell impact.
“The black market therefore gets to fill the vacuum of cuts in marketing, product, and operating expenditure in the licensed sector,” said Regulus. This point was echoed by the team at Macquarie, who warned that because UK duty is levied on GGR, higher rates “would mean bonuses would have to be cut, thus making black market offerings even more attractive”.
Spreadsheet scenarios
There was also strong criticism of the government’s calculations. Writing on Linkedin, Paul Dolman-Darrall, CEO of the iGaming studio G Games, echoed the thoughts of many industry executives when he said the Office of Budget Responsibility had been guilty of “spreadsheet economics at its finest” as it forecast a £500m revenue hit by 2029-30 and a 7% reduction in business volume for UK iGaming.
“Yet even after that demand drop, the Government still expects to be £1.1bn better off,” he said, before adding that reduced payout ratios, lower demand and a rise in offshore play could lead to a 15% drop in revenue for the sector, which on current figures would equate to around £1.2bn.
Rest is politics: The fact that RGD increased so sharply also raised questions about the effectiveness of lobbying from the industry. Dame Meg Hillier, chair of the Treasury Select Committee, said “the gambling industry’s scaremongering has failed”. Regulus said the industry needs to learn a lesson. “Major operators and their lobbyists finally to realise that a PR-led approach to influencing tax and regulation has led from one disaster to another.”
If it’s hard to argue the point, (online) gambling is also one of the few industries on which politicians can nearly double the tax rate with no fallout from either public or media. That trend can also be seen in markets like the Netherlands and France.
Shedding ballast: The tax hike will also lead to consolidatory moves in the UK and enhance the Gambling Commission’s regulatory focus as it receives £25m extra to fight the black market.
The Conexus Group is dedicated to driving growth and success across the global iGaming industry, including helping land-based and retail casinos transition online. Our key brands — Pentasia, Partis, iGaming Academy, and Incline — deliver specialised human capital solutions, M&A advisory, strategic consulting, training and managed services.
Conexus builds long-term relationships and provides deep sector knowledge, including expertise in the French market, to solve complex challenges. By orchestrating these services under one group, Conexus offers clients a streamlined partnership for enhanced performance and sustainable success.
Contact us for more information.
France’s social security budget heads back to chamber
Left, right and far right MPs to continue to seek compromise vote, ANJ updates self-exclusion service
So far so good: France’s finance bill for social security is heading back to the Assemblée to be debated as MPs were unable to agree on a final version during Wednesday evening’s vote on the draft law. Fears that gambling companies, especially online operators, might once again be targeted for tax hikes, have so far not materialised. French lawmakers are not expected to impose another raise after the introduction of new taxes in July and stakeholders and MPs will likely want to see their longer term impact before deciding on further measures.
The Autorité Nationale des Jeux has revamped its voluntary self-exclusion service for players wanting to protect themselves from excessive gambling risks. The new system “simplifies registration, strengthens identity checks and shortens the effective registration period to one day,” ANj said in a statement.
Registering on the service blocks access to land-based casinos and gaming clubs, online betting and poker sites and to FDJ and PMU’s retail outlets with immediate effect and lasts for three years.
Registration numbers were 40,000 in 2021 and have now reached 85,000, men make up 77% of registered individuals, 18-24 and 35-49 year olds 23% and 25% respectively, but the highest percentage is made up of 25-34 year olds at 33%.
Online sports betting as the largest regulated vertical is the main product from which players ask to be excluded. For over 65 year-olds, physical casinos are the main exclusion request.
Sorare cuts more than a third of its staff
One-time NFT unicorn continues to seek cost savings
Running out of road: Sorare has made 35% of its workforce, around 100 people in total, redundant as part of a “plan to safeguard jobs”, it told French media last week. The news is not surprising, the company closed its New York office last year and is struggling to recoup revenues that match the size of its marketing investments as the NFT-fantasy/sports betting craze of 2021-22 runs out of steam.
Revenues in freefall: News appeared this summer that the company’s revenues, in the form of the commission fees it takes from NFT player cards traded on its platform, have been in freefall over the past three years. The group has also been criticised for offering Klarna’s buy-now-pay-later finance options, which can be considered a form of credit and that real money operators are not allowed to offer in France.
The web 3 JONUM regulations that apply to Sorare were drawn up in 2023 and ban operators from offering players credit. However, with the regulatory decrees only sent to the EU Commission in October and due to be published in January after the standstill period, Sorare is for the time being able to offer customers payment options such as Klarna.
Vintage flip: CEO Nicolas Julia told AFP he expects a return to growth this year, but that “the market flipped, so we had to adapt”. The company was founded in 2018 and in 2021-22 raised around €580m and was valued at €4.3bn.
Founded in 2005, Play’n GO is a global leader in casino entertainment, known for iconic games like Book of Dead and Reactoonz. A pioneer in mobile gaming, the company delivers 350+ premium titles across 30+ regulated jurisdictions. Committed to a fun, responsible iGaming industry, Play’n GO collaborates with operator partners, regulators, and researchers to provide the world’s greatest casino gaming experience. Having expanded into music via its Play’n GO Music brand, Play’n GO is also a proud partner of MoneyGram Haas F1 Team. For more info, visit www.playngo.com
Results round-up
Robeson Reeves, the new CEO of Intralot, warned that forthcoming UK tax increases will hit online gaming margins but said the group is deploying “aggressive” mitigation plans to cushion the impact. Bally’s International Interactive is predominantly UK-facing and Reeves said the mitigation following “higher than anticipated” tax rises means EBIDTA guidance for 2026 is now in the range of €420m to €440m, down from €480m.
But echoing the views of Flutter and Entain covered earlier, Reeves said Intralot could ultimately benefit here. “Such tax increases have happened periodically in our markets and, historically, have led to market consolidation and market share growth for companies like Bally’s who have higher margins than other peers.”
His comments came as Intralot reported Q3 revenue fell 11.8% YoY to €74.5m, bringing total revenue for the first nine months to €242.5m, a 2.9% drop versus 2024, though stable on a constant-currency basis. The group generated a nine-month adj. EBITDA of €90.1m, with pre-tax profit of €8.8m, but ended the period with a net loss after tax and minority interests of €3.1m
Allwyn CEO Robert Chvatal said the operator was well prepared to “deliver the next phase of our growth journey” as it unveiled a 5% YoY jump in net revenue to €1bn, from a total revenue of €2.2bn (up 4% YoY). Despite the revenue growth, adj.EBITDA dropped 8% to €374m, reflecting “customer-friendly” sports results at investee Betano (Allwyn owns a 36.75% stake) and increased corporate costs tied to group structure simplification.
Net revenue growth was largely driven by the continental Europe division, up 6% YoY to €729m, with lottery performance in Austria and Czechia the key drivers. In the UK, where Allywn runs The National Lottery, net revenue rose 6% to €250m, with adj.EBIDTA up 50% to €9m.
Flagging Allwyn’s deal to acquire a majority stake in US DFS leader PrizePicks and the merger with OPAP, Chvatal said: “Our progress this year reinforces the strength of our proven strategy and, looking forward, we are well prepared to deliver the next phase of our growth story.” OPAP meanwhile reported a 6% YoY rise in NGR to €410m, with EBITDA at €214m and a net profit of €128m, up 6%.
Kambi is a leading provider of premium sports betting technology and services, empowering operators worldwide with cutting-edge sportsbook products. Renowned for its powerful data-driven sportsbook platform, flexible modular technology and proven risk management, Kambi helps partners deliver world-class betting experiences. With a focus on integrity, innovation and scalability, Kambi drives sustainable growth for regulated operators across global markets. Discover how Kambi can elevate your sportsbook offering — visit Kambi.com to learn more.
News shorts
Kambi and PENN Entertainment have extended their retail sportsbook agreement until July 2027 ahead of the current agreement ending at the end of 2025. Kambi currently provides its land-based betting services to 30 PENN properties in 13 US jurisdictions and has just been licensed in the state of Missouri. The partnership enables PENN to prepare for migration to its proprietary tech stack acquired as part of the $2bn buyout of Canadian brand theScore Bet.
Robinhood and market maker Susquehanna International Group have joined forces to acquire a 90% stake in MIAX Derivatives Exchange. Under the agreement, Susquehanna will act as day-one liquidity provider, while Robinhood will lead the venture and serve as the controlling partner. The new exchange, expected to launch in 2026, will allow Robinhood to list and clear its own prediction market contracts rather than rely on third-parties such as Kalshi.
Play 971 has become the first fully licensed iGaming site in the regulated United Arab Emirates market. According to a launch statement, reported in iGB, Play 971 went live earlier this week under licence from the General Commercial Gaming Regulatory Authority, offering online casino games, sportsbook and racing to players in select emirates. The operator, Coin Technology Projects LLC, shares an address with The Game LLC, the business behind the UAE Lottery.
DAZN has terminated its deal to broadcast Belgium’s Pro League football games after just half a season due to failure to agree viable distribution deals with networks like Orange, Proximus and Telenet. The company signed a five-year deal worth €84m a year in 2024 to broadcast the Belgian football games starting this season and said it was open to broadcasting games until the end of this season. The league said it would take “all necessary legal steps” to ensure DAZN honours the agreement.
Calendar
Events: 28 Nov: EGR Latam Awards, Nov 30–Dec 2: SiGMA South Asia, Dec 3: Genius Sports Capital Markets Day
Contact
Get in touch with Jake Pollard to find out more about Gaming&Co: jake@gamingandco.info
Thanks for reading Gaming&Co!