According to Reuters, citing data from the independent performance marketing company Gambler Media, the online British lottery market showed signs of contraction in early 2026. An increasing number of licensed operators are reducing marketing expenditures or are planning to withdraw from the United Kingdom market before stricter bonus provisions and significantly higher rates are imposed.
New regulations introduced by the British Lottery Commission will enter into force on 19 January. It is stipulated that the cap on the investment of the bonus funds will be limited to 10 times the amount of the bonus and the promotion of mixed products is prohibited. This means that in the future operators will not be able to combine bonuses for different types of products (e.g. bingos and casinos) into a single promotion. The regulators indicated that these reforms were aimed at making the bonus provisions clearer and improving consumer safety. However, these changes have also significantly limited the promotion of licensed operators in regulated markets. The lower demand does increase the transparency of the player’s experience — a 10-fold round is much more understandable than a structure that is much more complex, if not more than 65 times the past. At the same time, however, operating costs are expected to increase significantly. From April 2026, the long-distance lottery tax on online casino products will increase from 21 per cent to 40 per cent. On-line bingo operations will face similar tax increases. These reforms constitute the largest single cost increase in the online gaming industry in Britain in recent years. Gambler Media states that its media network has been significantly affected: many licensed operators have drastically cut down on marketing inputs, suspended access schemes for users in the British market, and even announced a total withdrawal. Some partners specified that they would close their British operations in March 2026. In December of last year, William Hill and Evoke, the parent company of 888, indicated that, following the increase in the British gambling tax, consideration was being given to disaggregating or selling the company as a whole. Evoke also reportedly considered selling its Italian business. Aspie Global has withdrawn from the British market, while PlayLuck ceased to operate early this year. Shortly after the budget was released, Flutter Entertainment reduced the adjusted post-interest tax depreciation and pre-amortization profit (EBITA) projections for the next two years. The company estimates that as a result of the increase in the network lottery tax, EBITDA will be reduced by some $320 million in fiscal year 2026 and another $540 million in fiscal year 2027 (estimated before any mitigation measures were undertaken).
Gambler Media claims that stricter promotion restrictions and higher tax rates are undermining the competitiveness of licensed operators, while offshore and black-market gambling websites are not subject to a “ten-fold cap” or a “cross-product promotion ban” and continue to offer more attractive and non-compliant promotional activities to British players. The British Lottery Commission has repeatedly warned that offshore gambling websites lack consumer protection and regulatory oversight. While the Government is taking enforcement action against illegal operators, industry sources indicate that continued high-pressure policies against licensed companies may further push players to unregulated platforms outside the British regulatory system. The largest British gaming company criticized the Government for having implemented “one of the largest tax increases in any industry in modern history” and warned that a nearly doubled Internet gambling tax would result in thousands of people losing their jobs, the flow of players to illegal websites and ultimately damage the horse racing industry, despite the Government’s claim that it had protected the industry. The Lottery and Games Committee (BGC), representing gaming companies and online operators, stated that the Minister of Finance ‘ s fall budget, although packaged as a victory for the horse racing industry, in fact threatened the wider ecosystem that supported the industry. BGC CEO Grainne Hurst stated: “This budget means that thousands of jobs will disappear, not the protection of horses, and the only winner is the black market”.
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