U.K. Budget: No Gambling Tax Hike But Gov’t Seeks to Simplify Current Structure
The U.K.’s gambling industry managed to avoid a tax rate increase in the Labour government’s autumn budget on Oct. 30, despite widespread speculation that remote gaming duty could rise to 50 percent of gross gaming revenue (GGR).
But budget filings did state the government would open a consultation on how to consolidate the U.K.’s gambling tax structure. Remote gaming and betting currently have different tax rates. Sports betting has its own 15 percent levy for net stake receipts, while iGaming is taxed at 21 percent of GGR.
The tax hike proposals were considered ridiculous by the industry. But the report had an immediate impact on the market, as publicly listed shares briefly decreased by up to 16 percent.
Chancellor Rachel Reeves’ note on consolidating the tax rates next year said the aim of the task would be to “simplify, future-proof and close loopholes in the system.” It is not yet known whether this process will include increasing the tax rate, but the industry believes it is likely.
Could Bulgaria’s Advertising Ban Lead to an Operator Exodus?
Tough gambling advertising restrictions implemented in May in Bulgaria have hit operator revenues hard and, with no real respite in sight, they are weighing up their options, including exiting the market altogether.
On May 18, the government introduced a tough set of new regulatory measures for the gambling industry, including a near complete ban on advertising. Almost overnight, licensed operators in Bulgaria were barred from taking out ads on radio, television and in newspapers, as well as on online media websites.
One example of those impacted by the changes is locally headquartered brand Sportingwin, which is eyeing markets like the U.K. and Romania as Bulgaria has become too challenging to navigate.
“Global research shows that when they have these bans put in place, especially limiting TV commercials, there is a drop of 20 percent revenue in the next two months,” Sportingwin investments director Mark Chakravarti told iGB. “I think it’s been very similar in the Bulgarian market.”
“As a small local brand operator, we have a better understanding of the local market, we have better expertise, so we are able to change and adapt,” he said. “But we can see that the big operators that are foreign, international – they are not aware of the local markets, they don’t have the geomarket expertise.”
EasyJet Airline Founder Launches Easybet Online Betting Brand
EasyGroup, the conglomerate that counts budget airline EasyJet among its businesses, has announced the launch of a new online sports betting brand EasyBet.
Developed in partnership with betting exchange Matchbook, the EasyBet.net website is now live and taking bets on a range of sports. Customers have access to various markets and bet types across a betting exchange model.
EasyBet.net is accessible in the U.K. but it is not clear where exactly the brand will be active. It is licenced by both the Great Britain Gambling Commission and Alderney Gambling Control Commission.
The launch comes after EasyGroup historically pursued several brand infringement cases around the ‘Easy’ brand. This includes taking action over websites EasyBet.com and South Africa-facing EasyBet.co.za.
Cherry AB in Preparations to Sell ComeOn Group
Bridgeport-owned Swedish operator Cherry AB is in talks with banks Moelis and Jefferies to source a buyer for its ComeOn Group business.
Reports in Reuters on Oct. 24 said ComeOn Group, based in Malta, is reportedly being valued at around €500 million (US$544.3 million), which is 8x to 9x its €60 million EBITDA forecast for 2025, according to the reports.
Cherry AB also owns restaurant gaming venues in Sweden and online B2B game developer Yggdrasil.
One source confirmed the talks to iGB, noting: “I’m not sure anyone strategic buys ComeOn, but it must be killing Bridgepoint to keep owning it.” Sweden is one of the operator’s primary markets, but the market regulating in 2019 “hit the business hard,” the source said.
Subsequent tightening of restrictions in Germany have also impacted Cherry AB’s online operations and, according to the source, it has sought to sell off Yggdrasil in the past but has not received any satisfactory offers.
Private equity giant Bridgepoint made an offer to Cherry in December 2018 as part of a consortium. It bid $1 billion at the time and subsequently delisted the Swedish gaming group from Nasdaq.
ComeOn operates 15 brands, including ComeOn, Mobilebet and Getlucky and it received a license to expand into the Dutch online gambling market in September 2022. It is a prominent name in Sweden’s online market.
