The UK online gambling market is starting to shrink in early 2026, as more licensed operators cut marketing or plan to leave the country. This is happening before new rules and higher taxes take effect, which will change how gambling companies operate. Data from Gambler Media, a marketing firm, reported by Reuters, shows that operators are increasingly worried.

From 19 January, new rules from the UK Gambling Commission will limit bonus wagering to ten times the bonus and stop mixed-product promotions. This means operators can no longer combine offers across products, like bingo and casino bonuses. Regulators say the changes make bonuses clearer and safer for players, but they also reduce the ways licensed operators can attract customers.

Rising Costs and Tax Burden

Lower wagering requirements have made bonuses easier for players to understand, since a ten-times rollover is much simpler than the old, complicated rules that could reach sixty-five times. But the industry is facing higher costs. From April 2026, the tax on online casino products will rise from 21 percent to 40 percent, and online bingo taxes will also go up.

These tax increases are some of the biggest cost rises the UK online gambling sector has seen in recent years. According to Gambler Media, some operators have already cut marketing, paused UK campaigns, or said they will leave the market. Companies like Evoke, which owns William Hill and 888, are thinking about a break-up or full sale, while Aspire Global brands have left the UK. Flutter Entertainment also cut its earnings forecasts after the tax increases, expecting losses of $320 million in 2026 and $540 million in 2027 before any adjustments.

Offshore Sites Gain Advantage

Experts warn that stricter limits and higher taxes make it harder for licensed operators to compete, while offshore and black-market sites can offer more aggressive promotions. The UK Gambling Commission says these illegal sites operate without protections for players. Gambler Media adds that continued pressure on licensed businesses could push players toward unregulated platforms outside the UK.

Industry Criticism of Tax Hike

The Betting and Gaming Council, which represents UK bookmakers and online operators, has criticized the government’s tax plan. The BGC called it one of the largest tax hikes on any industry in modern times and warned it could push players to unregulated sites. Grainne Hurst, the BGC chief executive, said: “This budget means thousands of job losses – not protection for racing.” She added: “The only winner from this Budget is the black market – they’ve hit the jackpot.”

Overall, the UK gambling market is going through a tough time as higher taxes and stricter rules force licensed operators to rethink their plans. Experts warn that if too many companies leave, it could accidentally boost illegal gambling.