How the New Tax Laws Will Affect New Casinos in the UK

Online casinos licensed and regulated by UK authorities are preparing for a significant shift in tax measures that will start coming into effect as of April 2026. While these changes won’t directly impact players, they will substantially increase the tax burden on casino operators.

New entrants will feel these changes most significantly, as they fundamentally change how new operators can enter the UK market. The increased duties will require substantial changes to traditional launch strategies and bonus structures. For existing companies with a strong client base and deep pockets, the changes will be a few more manageable adjustments.

Understanding what these changes are and how they will impact new casinos is essential from a user perspective, as future casino launches will be very different from what the market has been used to.

Understanding the Remote Gaming Duty Increase

As of April 2026, the main change to the UK’s gambling tax framework is a substantial increase in the existing Remote Gaming Duty (RGD). Currently, this duty is set at 21%, but it will increase to 40%. These changes aim to modernise and simplify the tax infrastructure surrounding online gambling. The changes being introduced will apply only to online casinos. They will have no impact on physical casinos or betting shops.

Additional changes are being introduced in 2027 that will create a new duty on players for all profits from online betting, but that is beyond the scope of this article.

The new rates, which come into effect on 1 April 2026, mean that any emerging operators launching in the UK will be forced to pay face significantly higher tax costs on their gross gambling profits. While this rate change is universal, established platforms with stronger financial foundations are more likely to have the footing in place to better manage the impact.

This change reflects rapid growth in the online gambling sector in recent years. The impact means a complete structural change in how operators allocate their marketing budgets and promotions for short-term and long-term sustainability. 

The Disproportionate Burden on Startup Casino Operators

With a 90% relative increase in the duty charged on operating profits, new casinos will be the most affected by the new tax changes in the UK. Starting up a business of any form is hard work and takes a lot of time and planning. Startup platforms are already juggling the cost of design, development, and licensing applications. Now, they are facing losing almost twice as much profit to tax as they had most likely budgeted for when they first proposed the platform idea.

This represents a significant risk and may impact investor engagement for fledgling casinos, putting them at risk before they even launch. The risk is that smaller casinos may withdraw from the UK market and seek a home in markets with friendlier tax rates.

For established platforms, the increase is the same, but they are likely to have separate financial pots that can share the risk of the increased duty. They will still need to revisit marketing strategies, but with less immediate pressure than new casinos entering the market.

Beyond the immediate profit impact, new operators face compounding challenges at every stage of market entry.

Financial Hurdles Facing New Casino Operators

Launching an online casino isn’t cheap; it never has been, especially in the UK. However, the impending tax framework changes had made it even more complicated and expensive—to the point that many companies, such as those in Estonia, may be scared away.

Obtaining a UK Gambling Commission license requires companies to prove numerous points before they can even start trading. They must demonstrate financial stability, technical capability, and robust player protection systems, including anti-money laundering and know-your-customer requirements.

While tax changes don’t directly impact these licensing requirements, they significantly increase the revenue requirements to successfully justify them to the commission.

Under current tax laws, casinos can offer high welcome bonuses to new players. This aids player acquisition and retention. This aggressive approach works well for newcomers. They could cover their start-up costs and turn a profit within 12 to 18 months. The sharp increase in UK RGD changes this entirely. Unable to offer such enticing sign-up rewards, many new casinos will face a longer battle to gain players and become profitable.

Another barrier to entry that will be indirectly affected by the new tax rules is the company’s liquidity reserves. A casino always needs to have enough cash reserves to cover player withdrawals, operating costs, and regulatory requirements.

Increasing the RGD and the resulting increase in the time between start-up and profitability means either liquidity reserves need to stretch further or be increased at the start. This creates a heavy risk burden on investors and can price undercapitalised operators out of the UK market.

How Higher Duties Will Shape Welcome Offers

It has been a long-standing tradition for casinos to rely heavily on extravagant welcome bonuses to entice players to their platform. The busier the market became, the more critical these bonuses became to lure customers away from existing platforms.

Free spins, win multipliers, and deposit bonuses became the industry standard for new accounts because operators could take the hit on their short-term margins. Friendly tax rates mean casinos could focus on long-term player value and retention. The new tax duties coming into effect mean this fundamental approach needs to be recalculated. This alone represents a significant risk, as the existing player base has specific expectations regarding account creation at online casinos.

New casinos now face the difficult decision of maintaining the attractive launch bonuses at the cost of a prolonged wait for profitability. Or they can cut back on promotions, but risk becoming lost in the business marketplace. One possible scenario is smaller bonuses or shorter validity periods, offset by an increase in minimum wager requirements.

The maths behind bonuses and free incentives has changed. It hasn’t removed their use, but digital gambling platforms need to be more mindful of what they offer and its impact on their finances. This means operators may need to find new and creative ways to entice players. Loyalty programs could become a more common offering, with rewards still available but earned over a more extended period. This allows new casinos the ability to spread the risk.

The new tax framework won’t mean the end of online casinos in the UK. Still, it underscores the need for innovation and creative ideas to continue delivering perceived value without taking a heavy financial hit.

Why Tax Pressure Could Drive Creative Differentiation

By increasing the tax pressure on online casinos, the UK will, unintentionally or not, discourage generic platforms from entering the market. Tight profit margins and an already crowded market make copycat sites less likely to succeed. This means that new casinos entering the UK market will need to become more innovative, bringing fresh ideas and a new look or feel to help them stand out from the crowd. More intelligent positioning and effective launch strategies that leverage this will be critical for survival.

There are still many underserved markets in the UK that new operators could look to target. Cryptocurrency users and mobile-first players are potential launch targets, while investing in specific, underserved game types may also be a viable entry point.

The higher duty costs are also likely to push increased partnership formation not only between casinos and payment processing platforms, but also toward more out-of-the-box solutions that give access to previously unexplored audiences.

It is also possible that the changes will drive a more open and share-forward mindset. While bringing a unique approach to casino design offers users something fresh, it also entails higher development costs. Sharing design efforts with other sites by trading development solutions through backend-focused partnerships could reduce operational costs and the eventual time to market for new operators.

Conclusion

While the sharp increase in RGD will have an undeniable impact on all online casinos, the shift is driven by a long-term perspective and ongoing changes in market dynamics. It shouldn’t sound any alarm bells for regular bettors.

Winners will continue to be paid, games will remain fair, and all requirements surrounding how games operate will stay the same. The changes will ultimately benefit the UK betting market, as any new casino platforms will likely be innovative and stand on a more secure footing than some currently do.

As of April, the landscape won’t be the same, but neither will it be weakened. This is the first step in ensuring that operators in the UK market have a strong commitment to succeed and a drive to offer players something truly fresh and innovative.