Richard Williams, partner at Keystone Law
The fallout from the Budget will be brutal
When increased remote gaming duty hike to 40% of takes effect on 1 April 2026, I anticipate this will hit the remote gaming industry extremely hard. We know that British remote casino, betting and bingo industry generated by £7.8bn GGY in the year to March 2025. Of this, online casino games generated £5bn, with £4.2bn coming from slots. In a second wave of taxation, from April 2027, remote betting duty (non-racing) will be increased from 15% to 25%. I anticipate that both of these duty increases will lead to a significant reduction in bonuses, marketing expenditure and employment costs, as operators make cuts to remain profitable. We have already seen announcements from the largest listed operators that intend to mitigate the increased taxation levels. I anticipate there being many disposals, as multinational operators exit the British market, while others try to regain profitability through volume and economies of scale.
I predict that at least one tier-one operator will need to make disposals or restructure and that many medium- and small-sized operators will exit. Longer term, we may see a pivot back to land-based gambling and operators moving away from remote gaming, particularly slots, in favour of betting and pool betting, which will be less heavily taxed activities. We’ll also see the prize draw industry continuing to expand rapidly, due to its low barriers to entry and favourable tax treatment.
Prediction markets will feel the heat
Prediction markets continued to go from strength to strength during 2025. Sport-related prediction markets in the US have so far avoided state gambling regulation on the basis that they are derivative-like contracts, which are regulated by the Commodity Futures Trading Commission (CFTC) and are not under state gambling laws. Operators have grown from a niche financial/crypto activity into an industry where billions of dollars are staked every month. It’s been estimated that staking on prediction markets in the US has increased by more than 100 times in the last two years.
The value of the major US prediction market operators has also skyrocketed, mirroring these levels of growth. As the market grows, other crypto and financial providers are joining the fray to take a piece of the action. However, state regulators have begun to push back against federal regulation, arguing that sports-related predictions are in fact unlicensed gambling. I predict that 2026 will be the year when the long-term regulatory position of sport-based prediction markets is challenged. Yes/no prediction markets (with the exception of financial spread betting) in Great Britain would undoubtedly be regulated and licensed as betting. The growth of prediction operators in the US and their appeal to the younger generation suggests it won’t be long before these operators look to cross the pond with similar business models.
The black market will continue to grow
In September 2024, Frontier Economics prepared a report for the Betting and Gaming Council conservatively estimated that £2.7bn is staked annually on the online black market in Britain. The report indicates that younger gamblers are more likely to be aware of and use black-market operators, with one in five 18 to 24-year-old gamblers using black market or social media/messaging apps to gamble. Surveys also found much higher use of VPNs to gamble by younger respondents and found that of players using unregulated operators, better bonuses, ease of setting up an account and anonymity were the major attractions of using the black market. I predict that, despite increased efforts by the Gambling Commission, unregulated gambling will continue to increase during 2026, particularly because higher gambling taxes are likely to lead to licensed operators reducing bonuses significantly as a result.
This will make the regulated gambling market in Britain far less attractive to high spending customers. VPN usage appears to have increased significantly since July 2025, in order to avoid age verification checks in line with the Online Safety Act. Despite the Gambling Commission being handed an extra £26m in the Budget over the next three years to “tackle the illegal market”, this is a relatively small amount given the technical complexity and the size of the task involved. I therefore predict that use of the black market to gamble will only increase during 2026.
Samuele Traversin, industry adviser and former Entain and Betclic exec
2026 as the year of the “sanity check”
These are not necessarily what I think will happen but what I genuinely hope the industry will finally come to terms with. 2026 should be the year the industry looks in the mirror.
Emerging markets are still emerging – and many will remain so for longer than business plans assume.
Brazil is the next big reality check. Volumes may well be there, but volumes don’t equal profits. Between higher taxes, marketing restrictions, regulatory friction and rising operating costs, returns are likely to disappoint many of those who rushed in expecting outsized outcomes. More regulation, more bans and more constraints are not a risk scenario – they are the base case.
If your business is 30% or more UK-driven, 2026 is the year you will be forced to completely rethink both strategy and operating model. Incremental tweaks won’t be enough – cost structures, product mix, marketing approach and geographic exposure will all need a fundamental reset.
Talent will be a bottleneck, meaning qualified talent will be increasingly hard to find. People who have genuinely experienced successful market entries and scaling are few.
Finally, the “last mile” is where value is created. This is where B2C needs to refocus. ROI, churn and LTV should be back at the centre of decision-making.
The last mile – frontend UX, acquisition efficiency, retention mechanics and lifecycle marketing – is where battles are actually won or lost. Not market entry headlines. Not license announcements. Not theoretical TAMs. Execution at the player level is what ultimately drives sustainable value.
Technology is no longer a differentiator – and in-house tech is overrated
The idea that every operator must run fully in-house technology feels increasingly outdated.
Technology is a must-have, not a competitive edge. Several B2B players today offer solid, scalable and compliant products at a fraction of the cost and risk of building and maintaining everything internally.
Owning the entire tech stack often means higher fixed costs, slower iteration and more execution risk – with limited upside. In many cases, partnering smartly beats building proudly.
More M&A opportunities – fewer real buyers
M&A opportunities will increase, but the market will face a shortage of qualified buyers. Many potential acquirers will need to come to terms with softer trading, higher taxation and tighter limits in their core markets before they can credibly deploy capital.
As a result, we are likely to see more assets for sale than balance sheets willing, or able, to absorb them. Valuation gaps will persist, processes will take longer, and only buyers with genuine strategic clarity, capital discipline and operational confidence will be able to move decisively.
The US: regulatory catch-up and rising competition
The US will remain the key market to watch. Regulatory frameworks are likely to catch up with prediction markets and sweepstakes models, closing grey areas that have been exploited to date. This should, in turn, push local regulators to finally take a more comprehensive and coherent approach to gambling regulation.
The inevitable consequence of regulatory clarity will be increasing competition, not less.
The post Industry predictions for 2026: Prediction markets cross the pond and in-house tech becoming “outdated” first appeared on EGR Intel.
Keystone Law partner Richard Williams and industry adviser Samuele Traversin opine on key sector trends to watch out for this year
The post Industry predictions for 2026: Prediction markets cross the pond and in-house tech becoming “outdated” first appeared on EGR Intel.