Britain’s online casino operators paid their first full quarter of duty at the new rate this summer, and the effect is now showing up in company filings rather than in forecasts. Groups with heavy UK exposure are reporting shrinking online revenue at home. The same groups are reporting growth in France and the Nordics. The squeeze on margins arrived as predicted. What was less obvious a year ago is how quickly the industry would move its spending somewhere else.
A rate that nearly doubled
The change took effect on 1 April. Remote Gaming Duty, which covers online slots and casino games, rose from 21% to 40% of an operator’s profits from British players. Bingo duty disappeared the same day and land-based casino duty bands were frozen for the year, so the increase landed almost entirely on one product category.
Ministers were explicit about why. Online casino games carry higher rates of harm than sports betting and cost less to run, which is how the Treasury justified setting the gaming rate well above the 25% that remote betting will pay from April 2027. Bets on British horse racing stay at 15%.
One detail matters more than the headline number for what followed. The duty is charged on a place of consumption basis, so it applies to profits from UK customers no matter where the company itself sits. A Maltese licence does not remove the liability. Relocating a head office changes nothing. The only variable an operator can genuinely move is the customer.
Where the money is going instead
Moving the customer means moving the marketing budget, and several of the larger European groups have done exactly that since spring. FDJ UNITED, the Paris-listed operator that absorbed Kindred and its Unibet brand last year, gives the clearest published picture. Group revenue for the first half of 2026 fell 4.5%. Take out the Netherlands and the United Kingdom, the two markets where duty went up, and online gross gaming revenue rose 6.6%, with France and Scandinavia carrying the growth. The company told investors its new online management would prioritise marketing investment, which in practice means putting it where the return survives the tax.
The gap is wide enough to justify the effort. The Netherlands raised its own rate to 37.8% in January, so there is little headroom there either. France does not licence online casino games at all. What is left is a band of markets across southern Europe and Scandinavia where the levy on gaming revenue still sits closer to a quarter than to half. At home, meanwhile, the same groups have spent the year trimming bonuses and closing betting shops.
None of that has thinned out the supply side. Operators have moved budget rather than withdrawn it. The list of European online casinos maintained by Europe-Online-Casino.com shows how little the number of brands competing for continental players has changed since April, with Maltese, German and Curaçao licences still sitting alongside each other in the same market. For a sector that spent the spring warning about contraction, redistribution is the more accurate word. The same operators are chasing the same players under a different tax authority.
The limits of a European retreat
Those authorities are not standing still. Italy has run a new licensing round that raised the cost of entry and reduced the number of approved operators. Germany taxes virtual slots at 5.3% of stakes rather than of revenue, which on a low-margin product can swallow more than the revenue it is charged on. A market that looks cheaper on its headline rate often is not, once the base that rate applies to is taken into account. Entering a market also costs money before it earns any. A local licence and local payment rails come ahead of the first deposit, and the brand recognition an operator built in Britain over a decade does not travel with it.
The comparison British operators are really making is against a domestic cost base that keeps rising across leisure. Hospitality trade bodies have spent the autumn pressing for a broader VAT cut, arguing that a 20% rate is undermining investment. Gambling has less public sympathy than pubs and hotels, and no minister is preparing relief for it. That leaves cost cutting and geography as the two available responses. Thinner bonuses are the visible part of the first. The less visible part is a marketing plan drawn for a different map.
What comes next for the UK
The next date in the diary is April 2027, when remote betting moves to 25%. Sportsbook operators have had a year to model it, and the same rebalancing logic will apply to them. Whether the Treasury collects what it projected is a separate question. Official forecasts assume operators pass most of the increase to customers, and that demand falls as a result. The night-time economy has already warned against further rises after this year’s growth speech. Britain’s online gambling industry has not left. It has simply started spending its money where the arithmetic works better.
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