British gambling executives returning to their desks with a post-Easter chocolate egg hangover will have only had their headaches deepened by the reality of the UK’s new online casino tax.

Levies have risen on remote gaming from 21 percent to 40 percent in the UK, as of April and the decision by Chancellor Rachel Reeves to hike rates marks the end of an era for one of the world’s largest online gambling markets.

If the UK was only facing a tougher tax bill, there might be reason for optimism, but there’s little to indicate that the pace of regulatory tightening is going to slow down any time soon.

What can we afford?

For one thing, there remains the looming threat of so-called affordability checks, which would require operators to assess the finances of their highest spending players before allowing them to gamble.

The UK Gambling Commission insists its plans for financial risk assessments are not a version of affordability and claims, to the chagrin of many in the industry, that it has never required its licence-holders to conduct affordability checks of any kind.

The commission has been piloting these risk assessments in a non-live environment since August 2024, with a promise that they be “frictionless” for all but a small percentage of consumers once they are rolled out.

It is now over a year since the pilot was initially due to end and 11 months since the regulator last issued an update on the pilot, in May 2025.

The deafening silence on affordability has not damped industry fury about their potential introduction, nor its efforts to lobby against them.

Last week, the Betting and Gaming Council (BGC) published new research which found that 65 percent of bettors would not be willing to provide documents like bank statements to provide their financial circumstances.

These players will instead, the trade group argues, flee to the black market, where they will be free to gambling without having to surrender personal information, but without any of the safer gambling protections that prevent them from succumbing to addiction.

In its pilot, the commission reported that 97 percent of simulated customers that triggered a financial risk assessment in its pilot were checked in a frictionless manner, although it did not disclose the rates of correlation between higher spending players and friction-full checks.

Despite this, BGC chief executive Grainne Hurst argues that the affordability plans “will push customers away from the regulated sector and towards the harmful, illegal black market, undermining the very protections these checks are supposed to deliver”.

The trade group says it backs regulations that protect players, but that these kinds of checks “go too far”.

There is some worrying real-world evidence to suggest that affordability, or a similar set of new rules, could drive players to the black market.

In 2024, the Netherlands introduced a policy of mandatory deposit limits of €350 a week, or €150 a week for those under-24, which can only be lifted once an operator has seen enough income evidence to be confident they can afford to gambling at a higher level.

The market saw a 20 percent contraction for the online casino sector in the months immediately following the policy’s introduction and the country’s gambling regulator estimates that more than half of online casino revenue is being pushed offshore.

Offshore looms

The UK gambling industry is also making an effort to convince officials that the black market is just as big a threat as it claims.

A new report, carried out by fraudster-turned-radio-presenter Alex Wood and funded by Flutter Entertainment, has sought to prove how easy it is to gambling offshore from the UK.

Wood claimed he was able to use the personal details of Grand National winning racehorse trainer Willie Mullins to sign up to VeloBet and was also able to register as a fictional seven-year-old girl.

The operator is one of the brands run by Santeda International B.V, which on its website says it is licensed in Curacao.

As of an April 7 update to the Curacao Gaming Authority’s website, Santeda’s temporary approval expired in December and its full licence application is currently under assessment.

Typically the chief executive of the Gambling Commission is a prime target for this kind of lobbying, but as things stand there effectively is no one at the top of the UK’s powerful gambling regulator.

Andrew Rhodes is due to leave his post as chief executive on April 30 and has already stepped back from day-to-day operators, as he is reportedly set to join a gambling industry consultancy. No one is yet in line to replace him.

Without this vacuum of power filled, the already quiet financial risk assessment pilot is fairly unlikely to move into its final phase, keeping the industry in a state of dreadful anticipation for some months more.

While Rhodes has hinted that it warned ministers against such a large increase to remote gaming duty, it would take a radically different new CEO at the pinnacle of the commission to see deviate from its trajectory of introducing tough new safer gambling rules at a regular cadence.

Carnage awaits

In the meantime, the market is bracing for the immediate financial impact of the tax increase.

The largest operators in the market have indicated that they have the resources to weather the storm, with Flutter estimating a $320m drop in EBITDA as a result this year.

In the long run, the providers who survive the coming onslaught may well find themselves with far fewer competitors. Bally’s has hinted at just this, telling analysts it is “well positioned to capture market share”, in a recent conference call.

The real damage dealt by the tax hike is expected to be to medium- and small-sized operators, which have smaller margins and less ability to adjust odds and return-to-player rates while still remaining competitive.

Or they will face a need to make the bonuses they offer less attractive to players in order to stay afloat and, in the process, degrade their offering so much that consumers choose to either stick with larger operators or look offshore.

One larger operator that is already struggling with the UK market is evoke and its William Hill brand. In the aftermath of the tax increase, executives say they plan to shutter around 15 percent of the company’s 1,400 retail outlets.

Debt-ladened evoke continues to try and find a buyer for its UK operators, but there are scant reports of interested purchases so far.

Time will tell

The UK market a year from now will not look the same as it does this April, but the culling of sevearl operators is unlikely to provoke any powers-that-be to take action.

Intervention from the state or its regulator to aid the industry is only likely if market contraction, combined with black market incursion, lead to much lower returns for the Exchequer than expected.

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