While the UK gambling industry has been posting some excellent financial results, there are concerns that that may not happen in the long-term. Will stricter regulation and possible tax rises cause major problems for those operating in the UK?
In the first three months of 2025, the online gross gambling yield (GGY) was £1.45 billion. That was an increase of 7 percent from the total earned in the same period last year. All seems to be going well but recent events could well have a major impact on the UK gambling industry.
Of that £1.45 billion GGY, £689 million came from online slots. That was 11 percent up on the total recorded 12 months ago. When you go to one of the finest 20 UK online casinos, it’s the slots section that is possibly going to be your first destination. There are big cash prizes to be won, especially if landing one of the many progressive jackpots that are available.
The slot games can be great fun to play but there is a downside to their popularity. Many players who suffer gambling harm say that it was online slots that began their problems. The government also agrees that online slots are a problem that needs to be dealt with to protect the wellbeing of those who play them.
Their view is that online slots are “a higher-risk gambling product associated with large losses, long sessions, and binge play”. There is particular concern over younger players spending a lot of time playing online slots. That’s why May saw new maximum stakes introduced for the games.
Those aged between 18 and 24 can now only stake a maximum of £2 on a spin of the reels. Action has also been taken to protect older players and they now cannot stake more than £5 per spin. Campaigners are still concerned over the speed of the games.
With online slots contributing so much to GGY, what damage will the new maximum stakes do to financial figures? One worrying fact is that the government did make an impact assessment and it estimated that operator GGY would fall by £181 million due to the changes.
Yes, the policy may give players a greater level of protection but it doesn’t quite fit in with the Labour government’s wish to see growth in the UK industry.
It’s not the only recent measure that has been introduced. There is now a mandatory levy that has been imposed on the UK gambling industry. The aim is for this to raise £100 million a year. Monies received will go toward research into and the prevention and treatment of gambling harm.
In the past, there have been voluntary donations made by the industry and that totalled £50 million last year.
To legally operate in the UK, a license is needed. These are issued by the UK Gambling Commission (UKGC) and recent years have seen them become increasingly stricter towards those it has granted a licence to.
Recently, Spreadex were ordered to make a regulatory settlement of £2 million. The UKGC found that there had been failings in areas such as anti-money laundering and social responsibility failings. This can include not taking sufficient action when a customer is depositing and losing large amounts.
Also being fined were TGP Europe but they opted not to pay the required £3.3 million regulatory settlement. As a result, they have now left the UK market. The sites they run will not be able to legally operate in the UK. That is causing problems for some English Premier League football clubs who have sponsorship deals with sites run by TGP Europe.
The problem of the unlicensed and unregulated market is also a major concern for the UK gambling industry. The fear is that with stricter regulation, players will decide to leave the licensed market. That could well happen as stricter affordability checks are made on customers.
That is an unpopular measure and players feel it is an infringement of their rights.
If more players do head to the unlicensed market, that’s not good news in many ways. It takes business away from the licensed operators and reduces the amount of tax revenue the Treasury receives. That’s because the unlicensed sites do not pay gambling tax revenue. It’s not good news for players either as the level of customer protection is lower at the unregulated sites..
With fears of future tax rises, UK companies are looking at expanding their overseas businesses. Betfair (a site owned by Flutter Entertainment) will be closing their affiliate market program for the UK and Ireland from the start of July. Their view is that “an increasingly complex regulatory landscape” is making life difficult for them.
Further expansion in markets such as Brazil, Italy and the US seems the way ahead for UK companies as they fear falling GGY due to the stricter regulation.r
