The iGaming industry is braced for change as taxation is now the dominant force shaping executive decisions and long-term strategies – and it is seen as unsustainable for those involved.

Anxiety in the UK industry, specifically, is growing regarding impending tax hikes, ahead of Chancellor Rachel Reeves’ upcoming autumn budget but other European countries are feeling the squeeze too. 

Considering the political, economic, and social pressures, SBC News trio Charlie Horner, Ted Menmuir and Ted Orme-Claye discussed the impact of tax in the gambling industry on iGaming’s latest Daily Podcast. 

Government decisions across countries will have lasting effects and Menmuir gave an overview of the current landscape, citing margins being squeezed across the board. “There’s just no escaping this. It will be the dominant subject matter till the close of the year,” He began. 

“We’re kind of seeing all European countries kind of revise their long-term strategies because we’re not talking about a market, you know, tax increases one or two markets. 

“Multiple markets at a point of about five to six percentage points on bottom line. So that’s taking a lot of kind of cash off your bottom line of beta and your bottom line profits and it comes at a time when you’ve got to kind of put the industry’s context forward where you have leadership and the board demanding that all kinds of margins be squeezed. 

“I think everyone’s kind of feeling the stretch at the moment.”

As a result, Horner suggested that stability and finalisation is important, given that changes can keep impacting the industry negatively, despite the strong regulation framework that is already in place. 

“This clearly isn’t healthy for the industry to have this constant arguing going on. What we do need is just sort of a finalisation and some sort of stability. 

“I know the UK is already has a very sound regulatory framework. Lots of countries look to us as an example of that when sort of developing their own regulations, particularly more emerging markets. 

“But we’ve seen in recent years how much it has become, maybe unstable is not the right word, but just often the argument is, the debate around it has not been consistent, has it?”

Looking further afield, other European countries have also had to contend with changing tax rates that Menmir believes that profits and tax rises are no longer sustainable. 

“Tax increases in Sweden that have gone up about four percentage points. That market’s been stagnant since post-COVID and then the Netherlands has had a very kind of rough transition from its COA regulation to today in a market that again will be kind of relaunched by the end of the year.

“You can make a lot of adjustments here, but at the end of the day, you know, tax is a bottom line impact and it’s what you’re to go back to invest the base and someone raised this point with me that still demands 10 % year on year growth for these operators. It’s no longer sustainable, I feel.”