Recently published figures for Q3 of the 2025-26 financial year revealed gross gambling yield (GGY) for UK online casinos of £1.5 billion. Will they be able to continue posting such results amid rising costs in the coming months?
The cost of a UK Gambling Commission (UKGC) licence is likely to be increased later this year. It’s the latest piece of bad financial news for UK online casinos. Although the online gambling industry continues to post impressive results, there are also concerns about the dangers of addiction.
Last year saw a new mandatory levy come into force. UK gambling sites reviewed by Dailystoke.com had been making voluntary payments with funds going towards researching gambling harm and treatment of those who have been affected. However, the government felt not all companies were making an equal contribution and introduced a mandatory levy. This is aimed at raising £100 million a year with some of the funds going to the NHS.
Then came the Autumn Budget which included details of a rise in Remote Gaming Duty. A rise had been considered long overdue but companies were shocked when the rate went up from 21% to 40%. This will come into force in April of this year. A further rise in sports betting tax rates will take place next year.
There has been stricter regulation introduced in the past year and more is likely to come into force in the future. One major rule change last year saw maximum stakes for online slots introduced and this year, action has been taken against the bonuses UK online casinos offer.
Financial results published since the maximum stakes for online slots were introduced haven’t been bad news for online casinos. Slots provide a large proportion of GGY for sites and for Q3 the figure was £788 million 10% higher than recorded in the same period 12 months ago.
The average length of sessions for players has fallen from 18 minutes to 16 minutes but sites will be relieved to see the high GGY figure. The overall GGY of £1.5 billion was up from the £1.42 recorded in Q2. However, compared to Q3 of the previous financial year, there was a 2% fall.
Last month saw a consultation period begin regarding a rise in the cost of a UKGC licence. These are required for a company to legally operate in the UK. As you will read, there are many companies who are unlicensed and causing serious problems for the Treasury, legal operators and gamblers.
The UKGC has a tough task regulating the gambling industry and regularly investigates companies who may have committed regulatory breaches. This has seen several companies issued with fines when breaches have been confirmed. With the UKGC also looking to deal with the problems being caused by illegal sites, their costs have been steadily increasing and not been matched by their level of funding, hence the existence of a shortfall that needs to be closed.
That is why they are calling for a rise of an average 30% but there are other options currently being discussed in the consultation period. Other options are a 20% increase and the one that the government prefers. That would see a 30% rise in licence fees but only 20% would be used for commission-related costs with the remaining 10% ring-fenced and only used for specific regulatory priorities. These would include strengthening their enforcement capabilities and taking action against illegal operators.
The UKGC say that if the increase was to be only 20%, this would lead to savings of £15.8 million needing to be made and possibly a 10% cut in staffing levels by 2030-31. They would find it difficult to be able to carry on their current level of investigating suspected regulatory breaches.
How would UK online casinos be affected by a further rise in costs on top of the mandatory levy and tax increases? Stricter regulation is driving players to the black market and that is a worrying problem for the legal sites. It’s not good news for players either as the levels of customer protection are not as high as they do not need to adhere to the new rules. The Treasury does not receive any mandatory levy or tax contributions so a strong UKGC is needed to lead the fight against the illegal operators.
Top companies such as bet365, Flutter Entertainment and Entain are global businesses. If the levels of regulation continue to increase as well as the higher costs, they may be forced to make cuts in the UK and concentrate more on overseas interests in South America, the USA and Asia.
