UK Remote Gaming Tax Rise to 40% Accelerates Consolidation but Black Market Expansion Poses Larger Threat
Flutter MD Richard Clarke expects a £500 million hit from the UK remote gaming tax rise to 40%. Tier-one operators could expand from two-thirds to 80% market share through scale advantages, amid job cuts at Entain and peers. He warned the black market’s faster growth is the primary threat over the tax itself.
SCCG Take — Tax-driven consolidation favors scaled operators, yet risks accelerating black market migration without stricter unlicensed enforcement. Regulators must balance revenue goals with protections that keep customers in the regulated market.
The UK remote gaming duty increase from 21% to 40% on 1 April is set to intensify market consolidation toward operators with the strongest balance sheets. Richard Clarke, managing director at Flutter-owned Paddy Power and Betfair, forecast a £500 million impact from next year, with pressures already emerging this year.
Clarke made the remarks at the SBC Summit in Lisbon, as reported by iGaming Business. While tier-one operators currently control around two-thirds of the UK market and could reach 80%, he identified the black market as the more serious risk if it grows faster than the regulated sector.
Scale Benefits Large Operators Amid Margin Squeeze
Clarke noted that certain regulatory and tax costs “don’t scale,” placing smaller operators at a disadvantage. “We’re a big business, and there are things we can do with one or two million that give us an advantage,” he said, adding that Flutter expects to gain market share as a result.
The duty rise has triggered cost-cutting elsewhere. Entain Plc is eliminating approximately 400 customer care roles, representing 20% of its support workforce across 11 countries including the UK. This follows an earlier global cut of 500 corporate, product, and technology positions. Rivals Evoke and Bet365 are pursuing comparable workforce reductions and branch closures.
Clarke declined to detail Flutter’s specific optimisation plans but referenced four dimensions the business is reviewing over coming months. Flutter employs 550 people full-time on safer gambling initiatives.
Where the Real Risk Lies
Despite potential gains from smaller operators exiting, Clarke rejected any notion of satisfaction. “Absolutely not,” he asserted. “If we end up in a situation where Flutter grows market share while the black market grows faster than the regulated industry, that can’t be something anyone should be happy about. We should be focused on addressing what drives the black market.”
He described black-market customer experiences as “horrific,” citing Flutter UK&I research first reported by the Racing Post. In tests, counter-fraud adviser Alex Wood accessed unlicensed sites via app stores and search engines without a VPN. Accounts were opened as a 213-year-old Charles Dickens for a £50 horse bet and a seven-year-old Bo Peep for a £50 basketball wager.
Clarke outlined three requirements for the regulated market to prevail: continued improvement in customer protection, proportionate regulation, and tangible progress against unlicensed operators. He observed recent Gambling Commission discussions reflected “a different tone from the past,” following the regulator’s receipt of a £26 million grant to tackle illegal gambling. The balance tipping toward the black market, he added, “is more of a risk than a tax concern.”
Operators and regulators must now convert improved tone into measurable enforcement that slows unlicensed growth while preserving proportionate oversight, or risk eroding the regulated sector’s position over time.
Reporting: iGaming Business (iGB)
Generated by SCCG’s automated editorial system from published source reporting. SCCG Management holds editorial responsibility.
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