Britain’s online gambling firms have drawn an unwelcome card – one that will likely have a seismic impact on the industry as a whole. As part of the autumn budget’s gambling tax reforms, remote gaming duty in the UK will almost double from 21% to 40% from April 2026. There will also be a new 25% remote betting duty from April 2027.
UK gaming tax to rise
The changes, leaked by the Office for Budget Responsibility before the chancellor’s official budget speech, have drawn industry concern over higher costs, potential black-market growth and reduced investment. Operators argue the steep duty rise will hurt profitability at a cost of thousands of jobs, while the government says the measures will help ensure gambling firms pay a fair share.
But how did it come to this? According to David McLeish, partner at UK law firm Wiggin, the increase is driven less by gambling-specific concerns than by wider fiscal and political constraints.
“The single biggest factor which led to the changes in duty was the state of the overall economy and the government’s intransigence on backtracking on an ultimately ill-judged manifesto pledge around not raising income tax rather than having to target specific sectors,” he says. In that context, gambling became “an easy target politically”.
McLeish argues the sector was further exposed by “the prominent misuse of statistics around the prevalence of problem gambling by politicians, former politicians and anti-gambling focus groups”, despite sustained lobbying efforts by the Betting and Gaming Council.
He adds that the policy’s rationale appeared muddled, noting that “the justification for much higher levels of gaming duty around higher-risk verticals seemed confused” and it failed to reflect “the very significant number of regulatory changes made either voluntarily, or imposed by the Gambling Commission, as part of the output of the white paper”.
While industry engagement has improved, McLeish suggests it had little impact on the final outcome. “The industry’s lobbying effort felt much more co-ordinated and consistent than in previous cycles,” he says, but “at times… it felt like the dice were loaded”. He finds it “all the more confusing” that tax changes justified by harm prevention “are likely to result in more consumers transacting with unlicensed operators”, particularly as regulators now recognise the black market threat.
Looking ahead, McLeish warns that operators will seek to offset the impact “whether through reduced headcount or marketing or other spend” and that “it is hard to see how some of the smaller gaming-driven online operators can stay in the market in the medium term”.
Still, he concludes: “The UK gambling industry has consistently shown itself to be resilient and it will no doubt continue to do so.”
Brazil legal market opens
Brazil formally opened its legal online betting market as of 1 January 2025, with 14 companies granted full licences to operate fixed-odds betting and gaming under federal regulation. A further 52 provisional licences were issued to firms needing to satisfy compliance requirements.
The regime, overseen by the Secretariat of Prizes and Bets (SPA), marks a significant shift from a previously unregulated landscape and aims to curb illegal activity while fostering a structured market environment. Operators must now meet licensing criteria and regulatory standards to serve Brazil’s growing betting audience.
By most accounts, Brazil’s transition to a regulated betting and iGaming market has been smoother than many feared.
“I believe the transition occurred as expected and normally,” says Ari Celia, director of Pay4Fun, crediting the regulator’s efforts. “SPA has done and continues to do diligent and dedicated work. We cannot forget the unprecedented nature of the regulation and the volume of processes and documents involved.”
Fabio Ferreira Kujawski of law firm Mattos Filho agrees that the launch confirmed long-standing expectations, arguing that it “largely validated what the grey market had long signalled: there is a substantial, engaged audience for gambling in the country”.
However, regulation has not eliminated all friction. While the framework is now in place, enforcement remains uneven. Christian Tirabassi, senior partner at Ficom Leisure, observes that Brazil has made “tangible progress, but real-world enforcement has surfaced challenges, especially around certification delays and consistent compliance, like any other market that went through regulation”. He adds that continued regulatory refinement will be essential to support a healthy transactional environment.
Illegal operators remain the most persistent problem. Celia notes that although “the major operators have joined the regulated market, even more than I imagined”, the “big problem remains the illegal market”. For him, the issue is not rulemaking but action: “The rules are already defined; what’s lacking is enforcement.”
Kujawski is more direct, warning that the black market “seems to remain attractive for smaller or less-structured operators, given the total costs of full licensure”.
Those costs – most notably the BRL30 million upfront licence fee – are already reshaping the competitive landscape. Celia believes the market can absorb them, arguing that “the market is very strong” and leaves little room for smaller players. Kujawski frames the shift more cautiously, noting that regulation has improved market quality while raising barriers to entry, reshaping rather than eliminating competition.
Early economic indicators are nonetheless striking: billions in projected revenue, thousands of jobs and growing tax receipts. Tirabassi points to sustained M&A interest as a signal of confidence, with local and international groups pursuing entry through acquisition. Policymakers, he argues, should prioritise stability and transparency to support sustainable consolidation.
Celia and Kujawski agree, warning that tax hikes or regulatory overreach could undermine hard-won gains. Brazil’s gamble has paid off so far; keeping it that way will require disciplined enforcement and measured restraint.
Bet365 considers a sale
Bet365, the UK‑based online gambling giant, is reportedly weighing one of the industry’s biggest ever strategic moves: a potential sale or partial float. Sources said the Coates family, led by Denise Coates, held informal talks with Wall Street banks and advisers about options including a full sale, a private‑equity stake or a US stock-market listing that could value the business at around £9 billion.
The speculation follows strategic shifts such as Bet365’s exit from China and expansion in regulated markets, and comes against a backdrop of intense competition and consolidation in global iGaming. An IPO, while offering liquidity and a new capital base, would require Bet365 to abandon its traditionally private stance.
Industry watchers see substantial interest from deep‑pocketed bidders and note that such a deal would mark a defining moment in online gambling, reshaping ownership of one of its most influential players.
Bet365’s reported flirtation with a sale continues to stir speculation across the sector. Ed Birkin of H2 Gambling Capital cautions patience: “Any process like this will take a lot of time – and with the UK budget having just happened, and the impact of any tax change on the Bet365 business, any corporate activity would likely have been put on hold until there was clarity over that.”
As for timing, Birkin sees multiple drivers. “After all the hard work that they’ve done over the past 25 years building up the business, at some point there was always likely to be some form of exit – and if you’ve been the main person/people driving the business forward, would you trust it to someone else or capitalise on what you’ve built?”
Competitive pressure, he argues, is not pressing: “I’d argue that Bet365 is still in a very strong position.”
The company’s longstanding strategy of measured expansion may shift depending on the structure of any deal. “Strategically, a private equity house taking a minority stake may push to do aggressive expansion to boost the business ahead of a full exit – however Bet365 doesn’t need new funds to do this. They could go more aggressive now if they wanted – they have the firepower – but with a private equity stakeholder, the strategy may change from a longer-term to a shorter-term focus.”
Moves such as the China exit and operational tidying appear preparatory rather than reactive. Birkin notes: “Tidying up ahead of any corporate activity probably seems more likely – but there could very well be other moving parts that people don’t see or know about.”
On valuation and potential buyers, Birkin is measured: “If I owned Bet365, there is zero chance I would accept equity and leave the value/payout in someone else’s hands. So for me a private equity full buy-out or partial stake to prepare for a full stock market listing exit would make the most sense. But in the gambling sector – what makes the most sense doesn’t always happen.”
Stake exits UK market
Britain’s gambling regulator ordered crypto‑focused operator Stake to exit the UK market in March 2025, following a probe into its advertising and compliance practices. Run on a white‑label basis by TGP Europe, the platform had previously been fined for anti‑money‑laundering and social‑responsibility breaches.
The Gambling Commission also warned Premier League clubs tied to unlicensed sponsors that they face legal and reputational risk. The episode underscores the regulator’s determination to police not only operators but also the wider ecosystem of sponsorship and advertising, signalling heightened scrutiny of white‑label arrangements.
The commission’s decision to force Stake out of the domestic market has sent shockwaves through the sector, highlighting evolving regulatory priorities around compliance, advertising standards and white‑label models. Wiggin’s McLeish notes that it “was somewhat of a surprise that the white paper didn’t tackle the prominence of advertising of largely non-UK facing brands around sporting events but, in part, the decision by the Premier League to cease front of shirt gambling sponsorship may have contributed to this”.
Stake’s marketing misstep, he explains, left its white-label partner exposed: “The reality is that there have always been coherent arguments that an operator geo-blocking the UK market didn’t, from a gambling legislative perspective, need to have a white label arrangement with a UK-licensed operator in place but Stake did and its marketing gaffe forced its white label partner (and therefore it) out of the UK market.”
McLeish emphasises the commission’s rationale: “Ultimately the Gambling Commission is right to seek to curb the use of a ‘rent a licence’ approach involving overseas operators who wouldn’t, for the wrong reasons, want to submit to regulatory scrutiny in the UK.”
The ramifications for football sponsorships are immediate. “A front of shirt ban doesn’t rule out sponsorship opportunities in UK football,” McLeish observes, but clubs must be diligent. “The Gambling Commission has made clear that when it comes to gambling sponsorship generally that expects the relevant club to undertake specific, ‘sufficient’, due diligence on the partner in respect of a British consumer’s ability to transact with an unlicensed site and have well-documented assurances from the operator in respect of their geo-blocking effectiveness.”
The regulator will independently verify compliance and, he warns: “it will have limited sympathy if a club advertises gambling brands or products that are not licensed in Great Britain but should have been”.
McLeish concludes: “It is vital that football clubs take legal advice and look to protect themselves contractually.”
Stake’s exit thus crystallises a broader regulatory shift: white-label arrangements and lax marketing oversight can no longer be tolerated, and the responsibility now lies equally with operators and their sporting partners.
Entain’s Gavin Isaacs steps down
In February Entain abruptly lost its chief executive after just five months in the role, underscoring ongoing instability at the FTSE 100 gambling group. Gavin Isaacs stepped down “with immediate effect” by mutual agreement, prompting an immediate drop in Entain’s share price and a return of Stella David as interim CEO while a permanent successor was sought.
The surprise exit came against a backdrop of regulatory scrutiny and leadership churn following a costly historic bribery case and strategic reshuffles. Despite the upheaval, Entain reaffirmed its guidance for strong underlying earnings.
Entain’s abrupt leadership change earlier this year could have rattled investors. Instead, the betting group appears to have entered a period of steadier execution. Since Isaacs stepped down, the transition has been seemingly uneventful from the outside.
Paul Richardson of Partis Solutions argues the company now looks more focused. “The business seems (from the outside) to be a more streamlined and efficient organisation,” he says. “It probably is still in too many markets but these will rationalise over time and it’s not a forced seller so should maintain pricing discipline.” The emphasis, for now, is on gradual improvement rather than bold strategic gambits.
That approach has found favour with the market. Recent trading updates have pointed to performance in line with expectations, with guidance holding steady. “Investors reward stability and the achievement of milestones on the way to growth,” Richardson observes.
What has faded, however, is a more speculative narrative. “I think the hopes for an M&A outcome have evaporated,” he says, suggesting Entain is no longer priced as a takeover candidate. That shift raises questions about the shareholder base: “It would be interesting to see which hedge funds are holders of the equity now and whether there are more long-term holders than in the past.”
Another change is coming in finance, with the long-serving chief financial officer, Rob Wood, set to depart and Michael Snape joining the group. Richardson sees little drama in the move. “I don’t see Rob going as any particular catalyst,” he says. Wood’s exit, he suggests, is unsurprising after a long tenure. “He’s done a good job so I expect someone will be looking to give him the extra responsibility of a CEO role.”
For Entain, consolidation – not transformation – appears to be the order of the day.
From the UK’s tax hike and Brazil’s launch, to Bet365’s potential sale, industry voices comment on the impact of the most-read stories of the year.