UK Remote Gaming Duty increase: a 'redistribution of tax pressure'
The increase in the UK Remote Gaming Duty from 21 to 40 per cent is much closer to a redistribution of tax pressure within an already highly regulated market rather than harmonisation, Oren Dalal said to SiGMA News. He remarked that the revised duty does not simplify the system, but rather shifts the burden across product segments.
Dalal, a regulatory intelligence analyst and founder of GamingMarkets, continued that online casinos are taking the most direct hit from a product economics perspective. “That’s where the margins are more exposed and tax capture is more direct,” he added.
He stated that this is more broadly consistent with how mature digital markets tend to evolve, as he spoke of how governments prioritise revenue certainty and enforceability over structural simplification, “especially in segments that are easier to monitor and tax”.
Dalal said that governments prioritise revenue certainty and enforceability over structural simplification, “especially in segments that are easier to monitor and tax,” as he remarked that this is more broadly consistent with how mature digital markets tend to evolve.
Impact on the UK iGaming industry
Asked about what sort of impact he anticipates that the changes which came into force on 1 April will have on the UK iGaming industry’s development going forward, Dalal replied that, “at this level”, Remote Gaming Duty stops being only a cost increase. He said that, at a certain point, the duty begins to influence how operators approach the market more fundamentally.
“You’re likely to see more focus on capital allocation, product mix, and how much exposure operators are willing to maintain to a single market,” he said. He continued that the UK remains highly attractive from a regulatory and demand perspective, but commented that the threshold for operating efficiently is “clearly higher”.
Continuing his point, Dalal said that one may note a shift in product strategy as operators gravitate more toward sportsbook or lower-margin verticals where the tax impact is less concentrated. He stated that the market will, in effect, shift from growth-led expansion to more efficiency-driven competition.
“It’s less about blocking entry and more about raising the standard. New entrants will need stronger balance sheets, more efficient cost structures, and a clearer positioning,” he said, responding to a question regarding whether the changes which came into force at the start of the month have set a particularly high barrier to entry.
Black market worry
Concerns have been expressed regarding how certain changes may inadvertently boost the black market and weaken the position of the regulated industry.
Asked for his thoughts, Dalal remarked that there is always some sensitivity with regard to black market risk. He said that as the overall burden increases, pricing flexibility in turn tends to decline, which can ultimately impact the competitiveness of regulated operators.
He said that one immediate pressure point is that of promotional intensity. “As tax increases, it becomes harder to sustain aggressive bonuses and player incentives… Whether this translates into meaningful black market growth depends on enforcement and payment controls. But structurally, if regulated products become less competitive, some level of channel leakage at the margins is difficult to avoid.”
Operator response
As the UK Remote Gaming Duty increase came into force, Evoke announced the imminent closure of around 200 William Hill UK betting shops. With that in mind, Dalal was asked whether he anticipates that other companies operating in the UK market may act similarly.
Responding to this, Dalal said that he would not link Evoke’s retail closures directly to the tax change alone. He commented that retail betting in the UK has been under pressure for some time due to digital migration, cost structure, and broader regulatory tightening.
He stated that what this type of fiscal change does is reinforce the need to allocate capital more efficiently across channels. “In that context, further rationalisation of retail footprints wouldn’t be surprising, particularly where margins are already under pressure.”
Viewing the situation as a whole, Dalal said that the key issue is not whether operators can absorb a 40 per cent rate, but rather that the question is whether operators continue to allocate capital to the UK at the same intensity. He remarked that this is where the situation becomes a strategic shift, not just operational.
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