Regulatory Pressures Challenge Growth Across UK Gaming Sectors

2025 has so far been a successful one for the UK gaming industry, particularly its online sector. Figures released by the UK Gambling Commission (UKGC) showed that online gross gambling yield (GGY) was higher than in the same period 12 months ago. However, can the impressive figures continue for the rest of the year?

The online GGY for 1 January to 31 March 2025 was an impressive $1.45 billion.  Year-on-year, that was a rise of 7%, though a slight fall from the £1.54 billion recorded in the previous quarter. The total bets and/or spins statistic also saw an increase. There were 25.2 billion made and that was 5% higher than the first three months of 2024.

The average monthly active accounts figure rose to 13.5 billion but the real growth was seen in online slots GGY. That totalled £689 million for the first quarter of 2025, 11% up on last year’s period. There were 23.4 billion spins (up 6%) and 10.1 million sessions lasted over an hour but the average session length remained stable at 17 minutes.

Whether such impressive figures can be maintained remains to be seen. Maximum stake limits have now been imposed on the online slot games. If aged 18-24 the maximum stake is now only £2 and £5 for older players.

These changes came into force in April and May. Just how much they will hit online slots GGY won’t really be known until later in the year. Q3 will be the first in which the new maximum stakes will have been in force throughout the entire accounting period.

That’s not the only problem that is affecting the UK gambling industry though. A new mandatory levy has also been introduced by the government. Previously, the industry did make voluntary donations that helped research into and treatment and prevention of gambling harm. That totalled £50 million last year but the government’s new mandatory levy aims to double that figure. Payments must be made to the UKGC by 1 October.

Taxation is also a problem that the UK gambling industry faces. Whether it be corporate tax, gaming duties or National Insurance rises, they are hitting GGY figures. One of the 20 leading UK betting companies is Flutter Entertainment. They run leading sites such as Sky Bet, Betfair, Paddy Power and Tombola.

Flutter says that in 2024, they paid £680 million to the UK government and have now announced they will be ending their affiliate scheme in both the UK and Ireland. The “increasingly complex regulatory landscape” is behind the decision.

They accept that further regulation is on its way in  both the UK and Ireland. Therefore, more emphasis will be placed on expanding in other markets such as the US, Italy and Brazil. They are already having tremendous success in the US with FanDuel who are the leading online sportsbook in the States so far this year.  Flutter holds around 30% of the Italian market but recently failed to get control of Italy’s lottery.

There is also the fear that gambling tax rates may rise in the future. A new system is being introduced so that’s another problem the UK gambling industry has to face in the future. Stricter affordability checks are also taking place and although described as “frictionless,” they remain unpopular with gamblers.

UK gambling companies fear that stricter regulation will see even more players leave the licensed and regulated market. Instead, they will play on the black market which is not regulated and offers its players lower levels of customer protection.

The problems are mounting up for the UK gambling industry with the UKGC continuing to take action against licensees. Spreadex were recently ordered to make a regulatory settlement of £2 million. Companies that fail to deal adequately with customers who are gambling and losing large amounts of money will have action taken against them.

That was also the case with TGP Europe but that overseas company opted to leave the UK market rather than pay the UKGC £3.3 million. It’s something that is causing problems for English football clubs who are sponsored by sites run by TGP Europe.

Flutter Entertainment is not the only UK gambling business that is thriving overseas. Bet365 have had success in the US and have recently continued their expansion in Brazil. The company, which is based in Stoke-on-Trent, recently signed a deal with the Allianz Parque stadium.

That is the home ground of Brazilian Serie A club Palmeiras. Those attending matches at the stadium will see the bet35 branding. The venue also hosts music concerts and bet365 hope the deal will result in them “consolidating our presence in the country.” Bet365 also has a growing presence in other South American countries and Canada. Such expansion is likely to continue as the UK worries gain momentum.