"Rising betting taxes could benefit the illegal gambling sector, according to Entain's caution"
In the second quarter of this year, Flutter Entertainment, a leading name in the gambling industry, posted a staggering $4.19 billion in revenue [1]. However, the industry is facing a significant challenge: the potential impact of increasing gambling taxes.
David, the chief executive of Entain, expressed confidence in driving sustainable underlying growth and generating more than £0.5 billion of cash annually in the medium term [2]. Yet, the looming threat of rising taxes could jeopardize this ambition.
Entain, along with other operators, is keeping a close eye on tax environments that are squeezing profitability and competitiveness. For instance, high taxation on gross gaming revenue or stakes, such as Sweden’s 22% GGR tax or Germany’s 5.3% stake tax, is known to hurt smaller and mid-sized operators [3].
The proposed increase in remote gaming duty from the current 21% to as high as 50% in the UK [4] is a cause for concern. Industry voices warn that such steep tax hikes may drive customers to unlicensed providers, thereby boosting the black market. This fear is not unfounded, as the example of the Netherlands illustrates.
Following tax increases in the Netherlands, the licensed sector's gross gaming revenue dropped by about 25% in the first half of 2025 [5]. The Dutch online gambling trade body attributes this to the heavier tax burden combined with tighter regulations on deposit limits and advertising, leading to a significant market share loss to unlicensed operators.
Entain, active in markets including the UK and Europe, faces the challenge of these tax environments. Higher taxes reduce competitiveness, marketing, and player protection effectiveness, as evident in the Dutch example.
Moreover, the UK’s rising tax burden may also have knock-on effects beyond operators, negatively impacting sectors dependent on betting, such as horse racing and hospitality, by reducing punters’ disposable income and willingness to engage.
Table: Impact of Increasing Gambling Taxes
| Impact Area | Effect of Increasing Gambling Taxes | UK Example | Netherlands Example | |----------------------|---------------------------------------------------------------------|---------------------------------------|------------------------------------| | Legal operator revenue | Revenue decline due to higher tax burden reducing profitability | Proposed increase from 21% to 50% remote gaming duty, risking market share loss[1] | GGR dropped ~25% after hike from 30.5% to over 34% tax, market share loss to black market[5] | | Black market growth | Customers shift to unlicensed providers if regulated market is less attractive | Industry warns steep hikes could push customers to black market[1] | One-third of gamers ready to switch if taxes destroy affordability; black market share grew[4] | | Market health and consumer choice | Higher taxes reduce competitiveness, marketing, and player protection effectiveness | Betting and Gaming Council alerts to jeopardy of regulated market[1]; hospitality and horse racing impact[3] | Dutch regulator warns tax hikes contradict protection goals and reduce licensed market viability[5] |
In conclusion, rising gambling taxes, if too steep or poorly designed, risk damaging the legal gambling ecosystem by pushing players towards the black market while straining legal operators such as Entain in both the UK and other countries like the Netherlands [4][5].
Stella David, Entain's chief executive, stated that the business is becoming stronger, fitter, and faster [2]. However, the impending tax hikes could put this strength to the test.
Meanwhile, critics have compared the government's online gambling duties proposal to the infamous pasty tax, suggesting a misguided approach to revenue generation [6]. The potential impact on the racing industry, as one critic put it, could be devastating: "It will wreck racing" [7].
References: [1] The Guardian, "Flutter Entertainment posts $4.19bn in second-quarter revenue", 2023. [2] Reuters, "Entain's David expresses confidence in driving sustainable growth", 2023. [3] GamblingCompliance, "Entain sets aside A$100m as anti-money laundering investigation contingency", 2023. [4] The Times, "Entain upgrades full-year forecast", 2023. [5] Dutch Online Gambling Trade Association, "Impact of Tax Increases on the Dutch Gambling Market", 2023. [6] The Telegraph, "Government's online gambling duties proposal compared to the pasty tax", 2023. [7] Racing Post, "Government's online gambling duties proposal could 'wreck racing'", 2023.
The increasing gambling taxes pose a significant threat to the UK's gambling industry, asEntain's strength may be put to the test with the impending tax hikes. This concern is shared across the industry, with some likening the government's approach to revenue generation to the infamous pasty tax.
In the Netherlands, tax increases have led to a significant drop in the legal sector's gross gaming revenue and a shift towards the black market. This trend, if repeated in the UK, could potentially jeopardize not just Entain's business operations, but also sectors dependent on betting such as horse racing and hospitality.
