UK gambling tax hike: what do affiliates say?

While the just-passed Black Friday week may have been a boon for UK shoppers, it was anything but for the iGaming space.

Following the gambling white paper released in 2023, the Labour government finally struck out, announcing a significant overhaul of the country’s online gambling taxation system in its November budget. Effective April 2026, the rate of Remote Gaming Duty (RGD) will rise sharply from 21% to 40%. Meanwhile, from April 2027, a new duty of 25% will be introduced for most forms of betting, up from the current 15%.

The news has sparked a wave of outcry across the operator world, with firms including Flutter and Entain issuing profit warnings and Sky Bet evacuating its headquarters to Malta. While affiliates are not required to pay for the duties, as a central acquisition channel closely tied to UK operator performance, how far will the tax hike ripple travel?

“A direct hit”

“Concerned, but not surprised” is Fruity Slots founder and streamer Josh Green’s reaction to the levy rise. As a UK affiliate who relies on long term revenue share income, he tells iGBA “it is hard not to see this as a direct hit to future earnings and growth”. In the meantime, he’s also applying for a GB Gambling Commission licence for his newly launched slots studio DreamSpin.

“Doubling RGD to 40% and increasing betting duty is going to squeeze margins hard. Operators will have to find that money somewhere, and the obvious places are product, player value and marketing budgets,” he explains.

Pavlos Sideris, founder of Double Up Media and owner of multiple UK-facing sites including SlotGods.co.uk, agrees with Green and says “the cost will undoubtedly be passed onto affiliates, with those on revenue share likely being hit the hardest”.

“I estimate somewhere in the region of a 20 to 30% reduction in earnings. And that’s ignoring the wider implications of the tax hike on the industry overall – fewer operators, less competition, more power to the big boys and therefore less reliance on affiliates,” Sideris adds.

Having run the Nottingham-based affiliate site Glitzy Bingo since 2007, Rachael G believes the latest announcement will impact her sector disproportionally. While bingo duty is abolished in chancellor Rachel Reeves’ budget, the online industry is still subjected to the surged tax rate. This is complicated by what she observes as a clear decline of the UK’s bingo offerings in recent years, as operators “prioritise fast churn and slot revenue, resulting in bingo losing visibility and investment”.

“If UK online bingo has a future, the sector needs a reset. A bingo site should be a bingo site. A casino site should be a casino site,” she adds. “The old model is not working. For online bingo to survive, it needs to rediscover its identity and rebuild trust with both UK players and UK lawmakers.”

Affiliate partnership shift

Explaining the ripple effect, Green says he expects to see operators signing fewer revenue share deals with affiliates and offering more CPA and hybrid commissions instead, as well as pulling back from UK specific campaigns, branded content and streaming partnerships. Moving forward, both operators and affiliates will shift to non-UK markets “where the ROI will remain more attractive”.

Brendon Spiteri, head of commercial at affiliate BI platform Routy, writes on LinkedIn that the cull will likely start with small to medium sized affiliates as operators cut costs. He also anticipates “more top lists shifting towards offshore offers pretty quickly”, which offer CPA deals as high as £500, compared to the usual £40 to £80 range from the regulated market.  

“Affiliates currently contribute around 30 to 50% of acquisitions for most operators. A big chunk of that sits with the large affiliate groups, but once these big affiliates see even a small dip in revenue, they’ll eventually need to shift some of their inventory offshore just to maintain their numbers,” Spiteri explains.

For Rachael G, the tax hike adds uncertainty to her future partnerships: “For now, I am not able to take on newly launched unknown casinos unless they offer a genuinely good and unique bingo product or something else that is clearly different. Please do not contact me with new marketing requests until we have a better understanding of how the industry is going to develop. New sites will likely dilute the visibility of the brands I already promote.”

Black market on overdrive

In the official policy paper, the UK government explains that the intention of the tax rise “is to disincentivise gambling companies from pushing consumers towards what are considered more harmful products”. It is estimated that the increased duties will raise over £1 billion per year for the UK Treasury.

BetBlocker founder and former igaming affiliate Duncan Garvie, however, disagrees with the rationale and says he “can’t see any logic to the idea that raising taxes will somehow reduce gambling harm”.

“The root problem with that theory is that shrinking the legal market doesn’t reduce either demand for the service or the availability of gambling as a whole,” he tells iGBA. “The black market is so easily accessible at this point and widely signposted in everything from pornography, to influencers and mainstream UK football strips, that any reduction in engagement with the legal market is unlikely to result in a reduction in gambling harms.”

Although the government promises to allocate an extra £26 million to the UKGC over three years to tackle the illicit market, Garvie describes the amount as “a drop in the ocean” compared to the multi-billion worth black market.

“£26 million sounds like a lot, but it’s like not even bringing a knife to a gun fight,” Garvie says. “If we want to see a reduction in gambling harm as a consequence of this policy shift, the government should ringfence a significant proportion of that tax revenue to invest in harm prevention, treatment and research.”

While Green agrees with some parts of the planned reforms like banning credit cards for gambling, he believes that the less attractive offerings from the regulated market will only drive players offshore. To effectively reduce harm, he suggests “smarter, evidence-based interventions and proper funding for treatment and education, not simply ratcheting up tax on the regulated side and hoping that somehow fixes addiction”.

Speaking to iGBA, Routy’s Spiteri adds that he has additional concerns about regulatory oversight when affiliates move offshore. In a previous iGBA feature, gambling lawyer John Hagan explains that although the UKGC has the power to issue cease and desist notices to affiliates who partner with non-Gamstop casinos, enforcement remains an uphill battle. Currently, unlike other jurisdictions like some US states and Canada, the UK does not require affiliates to obtain licences to promote offers.

“I don’t see how regulators will be able to maintain control over affiliates promoting offshore brands,” Spiteri says.

“Even if the UK does require affiliates to register, UK-licensed operators are the ones being put under pressure. Over time, this creates an environment where the black market is likely to grow. This decision also suggests a disconnect between the UK Government and the UKGC. In my view, the UKGC should oppose this tax increase, as its priority should be safeguarding the regulated market rather than just imposing measures as this situation could ultimately end the UK’s white market ecosystem.”