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iGaming’s Future: Tax pressure, AI disruption and the fight for shareholder confidence
The online gambling boom that once promised effortless growth and quick profits has entered a sobering new chapter. For iGaming operators across the UK and EU, the challenges are no longer just about user growth. They now come from steeper regulation, heavier taxes and the AI evolution demanding serious reinvestment. For shareholders once attracted by sky-high growth, the question becomes whether iGaming can still generate lasting value or whether the sector is seeing a reset.
Regulation and tax are reshaping the economics of iGaming
The UK government has delivered a blow to the iGaming sector. The newly announced budget raised the tax burden on online casinos and betting firms dramatically. Remote gaming duty is set to jump from 21 per cent to 40 per cent from April 2026, and a new 25 per cent rate on remote sports betting will be introduced by 2027.
The market reaction was swift. Shares in major betting companies fell sharply, with some dropping as much as 15 to 20 per cent. William Hill, 888, and others in the sector, have publicly warned of a looming “profits hit” and even potential job losses.
These changes are not confined to the UK. Across the EU, governments have been tightening rules around advertising, compliance and safer-gambling regulation. Licensing requirements are stricter, oversight more intrusive, enforcement actions more common. For iGaming operators, this marks a transition from a growth-oriented digital industry to one increasingly treated as a regulated utility – still profitable, but perhaps only under rigorous discipline and compliance.
Why hasty shareholder exits undermine the industry
The impulse among investors might be to sell, to exit before profits are eroded. But premature sales risk creating the decline they fear. When share prices slump, operators lose access to cheap capital, refinancing becomes harder, and investment in infrastructure gets delayed or cancelled.
Firms weakened by a sudden sell-off may be forced into austerity: cutting marketing, trimming operations, or even exiting regulated markets entirely. What looks like prudent risk-aversion may turn to collapse – brought about by the very investors who initiated it.
New revenue reality
Historically, UK and European iGaming revenue has been driven by online casino games, sports betting, poker and affiliate marketing. That model produced strong top-line growth – but it always relied heavily on generous bonuses, aggressive user acquisition, and quick sign-up and bonus pipelines.
Under the new tax regime these incentives are being squeezed. Marketing budgets and bonus offerings are being reduced because aggressive promotion has become harder. Several industry sources now report that online casino proceeds remain substantial but are more tightly managed, with firms prioritising retention over recruitment. In that environment, sustainable revenue will come not from volume growth but from retention, user experience and long-term loyalty. The industry is shifting to platform quality, transparency, customer trust and regulatory compliance.
AI and data today are essential
If the iGaming sector is to remain attractive to long-term investors, companies must pivot from growth chasing to structural resilience, transparency, and disciplined execution.
Used properly, AI can reduce costs, increase lifetime value per user, and deliver a smoother, more trustworthy user experience. It can transform iGaming from a volume-driven, marketing business into a technology-first, product-driven entertainment platform.
Shareholders must therefore evaluate not just whether a company uses AI, but how. Is it deployed with transparency, fairness, and safeguards or simply to chase higher short-term spend per user? The difference will determine whether AI becomes the industry’s lifeline or its downfall.
Operators must give investors clear, risk-focused reports covering churn and retention, compliance costs, geographic and customer exposure, regulatory risks, and profit forecasts that realistically reflect the impact of new taxes and rules.
AI is not simply a marketing accessory, but a core infrastructure built to deliver fairness, transparency and reliability under heightened regulation.
iGaming stakeholders must diversify licensing portfolios to avoid over-reliance on any single national regulation environment. With the UK leading in tax changes, regulatory risk will drive businesses to seek stability in multiple jurisdictions across Europe.
Responsible gambling, transparent payouts, fair odds, and robust customer protection should form the core of a value proposition. These elements are not expenses but essential competitive advantages.
As the iGaming Industry matures…
Critics often paint online gambling as inherently exploitative. And there are indeed real risks such as addiction, irresponsible play and financial harm. But a properly regulated iGaming sector that emphasises transparency, player protection, responsible gaming, and robust compliance can evolve into a legitimate digital entertainment industry. In addition it will continue to support jobs, contributes tax revenue, drive fintech and payments innovation, and offers consumers a regulated alternative to illicit gambling markets.
Companies that commit to fairness, social responsibility and stability may deliver slower growth than the hyper-growth years of 2018–2023, but they will also be far more resilient. For long-term investors, the trade-off of slower but steadier returns, lower volatility, lower regulatory risk is beginning to look far more attractive than boom-and-bust cycles.
Stability will define the next decade
The tax rises announced this week and the wave of regulatory tightening across Europe are a clear signal: the free-wheeling expansion is over. It certainly does not mean that iGaming is doomed. Rather it is entering a new phase one in which value will be built through compliance, technology, responsible practice and operational discipline.
Investors expecting exponential growth may be disappointed. But those prepared to back companies that focus on consolidation, technological upgrading, regulation and shifting consumer habits will find significant long-term returns. As some banking analysts and market.
watchers have already noted, this could trigger consolidation, reducing competition and leaving a smaller number of robust, well-funded operators who can navigate the new landscape.
The shareholders who profit will be those who stay long enough to watch the industry mature into a regulated, stable digital-entertainment sector away from the risky speculative trade model. iGaming will carry on generating shareholder value. It just requires a different game plan.
