The betting business is one of the most developed entertainment fields, with a multi-million fan base worldwide. Europe is considered the industry’s birthplace, yet it is here that operators today face the most significant regulatory pressure with constantly increasing taxes and ad restrictions.
Casino Market’s team has analysed current trends and identified key factors that are reducing the profitability of legal bookmakers. Our experts provide detailed consultations and hands-on assistance on developing iGaming projects.
Fiscal Pressure in the Netherlands: Consequences
In 2024, local authorities announced an increase in the tax rate for gambling companies. The initiative came into effect a year later. Since then, analytical agencies have recorded a gradual decline in GGR within the country and a parallel jump in offshore activity.
Gross revenue figures for certified platforms are as follows:
- 2023 — €290 million;
- 2024 — €353 million;
- 2025 — €286 million;
- 2026 — €285 million (est.).
Meanwhile, foreign portals’ profits in the state are expected to reach €192 million by the end of this year, compared to €123 million in 2023.
Shifting Industry Balance
Similar policies are being implemented across the broader gambling market in Europe. Regional authorities are seeking to offset budget deficits partially. Nevertheless, increasing taxes not only fails to make up for lost revenue but also shifts the balance between the legal and grey sectors in favour of the latter.
Henk Wolff, a prominent iGaming adviser, notes that governments are taking the path of least resistance. Yet, as soon as the rate exceeds 30%, Europe will see a rise in unlicensed offers, as legal operators lose their competitive advantage.
The harder a country tries to extract additional profits from the industry, the more noticeable the adverse effects become. It is clearly evident in Great Britain, Belgium, and now, the Netherlands.
The situation raises concerns not only for businesses but also for end customers. The more lucrative offshore offers appear, the higher the risk of encountering fraud, financial crime, identity theft, and addiction-related issues.
Critical Point in Tax Policy
Last year revealed an important stage for Dutch sportsbooks: business taxes climbed from 30.5% to 34.2%, then to 37.8% in 2026. This surge led many smaller brands to exit the market.
LiveScore Bet launched in the jurisdiction in 2021 and was forced to close operations in November 2024. The local division was among the 1st licensees following a major regulatory overhaul, and its platform had a million users. Sam Sadi, the firm’s CEO, notes that such a start seemed like a strong foundation for further development, as it was in the UK.
Yet the Dutch authority introduced stricter controls, followed by a record tax rate of almost 50% in total. Under these conditions, investing no longer made sense, and the brand left.
Forced Exit Scenarios
After closing the business, Mr Sadi explained the step using elementary math: the initial market channelisation stood at 80–90%, but after changes, it dropped to about 60%. This downward trend continues to spread across Europe.
The executive does not regret ceasing operations in the Netherlands. He calls it one of the easiest decisions for both the company and him personally. The expert welcomes a rational approach based on plain calculations. Forecasting and industry predictability lead to the logical conclusion: once taxes cross a critical threshold, investments become unprofitable.
Mr Wolff shares this vision. He sees that the Dutch jurisdiction is becoming increasingly complex, raising entry barriers and squeezing out small businesses. The government itself is, to a certain extent, driving the market into a dead end. The consultant believes that it is better to avoid this state for launching a wagering platform.
Cross-Border Signal of Stagnation: UK and Sweden
Another telling example of excessive tax pressure on the gambling sector is the UK, where the rate has reached 40%. The increase came into effect on April 1st, 2026, and has become one of the most noticeable signs of the local industry’s transition to survival mode.
This regulatory approach not only reduces the number of small operators but also encourages large players to seek more stable and accommodating jurisdictions. In this context, Flutter can no longer be considered a purely British corporation: today, it is more of a US-focused brand.
Currently, in the United Kingdom, 30–35% is the maximum expected margin for certified gaming companies. Meanwhile, the profitability of offshore operators reaches up to 90%.
A similar trend is observed in Sweden. The country set the tax rate at 22% in July 2024, triggering a sharp increase in traffic to the black economy. Stopping the penetration of illegal offers is becoming difficult, even with enhanced digital controls.
Pressure on Businesses: Advertising Restrictions
Along with growing tax burdens, many European nations are actively introducing limits or bans on both offline and online gambling marketing. This approach further slows industry development and makes it more difficult for licensed operators to compete.
Several examples:
- Italy has imposed sanctions on printed promotion and reduced airtime for classified ads, limiting the window to 11 pm to 6 am.
- Belgium has banned marketing offers from gaming and betting companies to the general public.
- The British Premier League will no longer place gambling sponsor logos on the front of footballers’ shirts.
Charles Lee, kwiff’s CEO, claimed that, because of these restrictions, operators are seeking loopholes in the legislation. They are forced to do this, as otherwise, it is impossible to compete with offshore portals that are not bound by such limitations.
In Mr Sadi’s opinion, the British authority has chosen a too blunt approach rather than tailored rules. For instance, digital channels could block ads from reaching non-target audiences. Modern technology already allows for such deep segmentation.
Shadow Sector Growth: Result of Harsh Regulations
Heavier tax burdens combined with extensive advertising limitations create favourable conditions for illegal rivals. Turkey remains a prime example. iGaming was banned in the country back in 2007, and a year later, authorities began strictly controlling bookmakers.
As a result, offshore platforms’ yearly turnover grew from $500 million to $2 billion, while the certified domestic market never exceeded $1 billion. Against the backdrop of more competitive foreign offerings, the legal Turkish product proved virtually unviable. According to Mr Sadi, a similar scenario is gradually unfolding in Europe.
Forecasts for regulated destinations are as follows:
- In the UK, approximately 25–30% of the industry could go into shadow in the next 2 years.
- The Netherlands has already lost approximately 30% of its traffic since the new rules were implemented.
- Germany has become one of the leaders in the growth rate of the illicit sector, with the figure exceeding 80%.
If the current policy remains in place, pressure on licensed operators will further increase. Consequently, more audiences will migrate to offshore platforms.
Inevitable Market Consolidation: Regional Situation
If the trend toward stricter regulation continues, only the largest brands with sufficient resources to offset rising tax costs will be able to maintain their niche. In this context, success depends on the size of a business.
Previously, joining the ranks of tier-1 UK operators required annual revenues of approximately £100 million ($133 million). Now, even companies of this scale are gradually losing ground, while leadership is concentrated among global giants such as Entain, Flutter Entertainment, and bet365, each with billions of dollars.
Possible development scenarios for small and medium-sized businesses include:
- exiting the industry;
- merging with larger brands;
- moving to offshore jurisdictions;
- relaunching in developing markets.
The latter option is becoming relevant even for the top corporations. For instance, Flutter may eventually focus more on its American FanDuel or expand actively into Georgia and Italy. The RSA and Nigeria are generating additional interest. Even with current legal and infrastructure levels, they are already generating high, stable traffic.
Mr Wolff presented his list of countries that retain industry potential in 2026:
- Great Britain. Although the tax situation is challenging, the nation still offers significant opportunities for the betting segment.
- Germany. Despite the legislative restrictions, the state remains attractive due to its strong economy and great audience engagement.
- Finland. Regulation of the sphere is scheduled to begin in July 2027. Nevertheless, some operators underestimate the jurisdiction, viewing it as relatively small.
- Ireland. The government is modernising its framework gradually and openly, and local customers have traditionally shown a strong interest in gambling.
- Sweden. After taxes were increased from 18% to 22% in July 2024, the market was perceived as too expensive. Yet, against the backdrop of further rate surges in other countries, the conditions no longer appear so stringent.
- Eastern Europe. Many states retain untapped growth potential. Mr Wolff pays particular attention to Georgia and Azerbaijan.
- Africa. The region is considered one of the most promising hubs due to its high audience engagement and significant scaling prospects.
- Latin America. This destination is still dynamically developing its framework, but is already capturing the attention of iGaming representatives worldwide.
- Southeast Asia. Distinct cultural peculiarities affect industry perception. If countries like Japan start regulating, they would be highly appealing to investors.
Growth in Today’s Reality: Innovative Concepts
Amid increasing oversight pressure, personalisation of the user experience is becoming a key factor in sustainable development. Bookmakers listen closely to what their audience wants. Feedback remains one of the most valuable sources of information. Since margins continue to decline globally, it is logical to shift the focus to long-term customer retention.
According to Mr Lee, sustainable results can be achieved through:
- concentrating mainly on the mobile sector;
- constantly expanding the range of offerings;
- adapting products to current bettor demands;
- searching for new channels of user interaction.
An interesting example of this strategy is LiveScore’s app, not directly connected to the sportsbook. The solution is positioned as a news resource with match results and highlights of key events in various disciplines.
Mr Sadi commented on the audience distribution strategy between services, stating that the core wagering platform exhibits a typical market churn curve. At the same time, users who leave the betting website remain active within the ecosystem, now engaged with a mobile news resource.
Thus, the company does not lose its audience: visitors simply move between different products. This strategy opens up virtually unlimited opportunities for scaling. For instance, the corporation recently partnered with X to provide access to live video highlights of matches from the world’s leading leagues.
The Main Things About Europe’s Betting Sector in 2026
Experts agree that legal stability remains the most fundamental condition for the market’s further development.
Central insights on the matter:
- Even under high tax burdens, operators are willing to serve players if authorities ensure transparent and predictable rules.
- Businesses need to understand long-term growth conditions and avoid abrupt oversight changes without prior preparation.
- If Europe continues to tighten regulations, licensed brands risk losing their competitive advantage and ceding industry share to the shadow economy.
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