Entain Says UK Gambling Tax Hike Is Helping It Gain Market Share

Entain says the U.K.’s higher online gambling taxes are creating opportunities to take market share as competitors adjust to the new regime, despite the tax increase putting growing pressure on its own profits.

The owner of Ladbrokes and Coral finished H1 strong across several of its major markets. That includes continued market share gains in the U.K., Australia and Spain. Entain said it maintained its position in Brazil despite a difficult regulatory and competitive environment.

Management did not raise its full-year outlook despite H1 performance exceeding expectations. It cited the full six-month impact of the higher U.K. tax rate in H2, planned marketing investment and uncertainty in some markets.

“The tax obviously steps up in the second half of the year, and that has created a huge amount of disruption in the U.K. market, which we have been taking advantage of,” CFO Michael Snape said during Entain’s H1 earnings call.

We are gaining market share. We are growing really nicely.”

Entain’s U.K. online net gaming revenue (NGR) increased 13% during H1, with gaming up 13% and sports up 11%. Its retail business also continued to outperform the market, recording an eighth consecutive quarter of outperformance.

Australia also delivered strong results with online NGR increasing 13%. In the Brazilian market, the company maintained its position, which executives viewed as positive.

Entain Wary of H2 Competitive Environment

Management cautioned against assuming that the strongest H1 growth rates would simply continue through the rest of the year.

You cannot predict what that competitive environment looks like in the second half of the year,” Snape said. “So that is why we have taken a more balanced view.”

The U.K.’s remote gaming tax increased from 21% to 40% on April 1. That means Entain absorbed the higher rate for only three months in its first-half reporting period. Snape noted that the company will face a full six months at the higher rate in H2. Still, the increase resulted in a £56 million negative impact on H1 EBITDA.

Entain has previously outlined measures intended to mitigate approximately 25% of the tax increase during 2026, which management said remain on track. The company is now targeting a broader £100 million in net annualized run-rate savings by the end of 2027 to offset at least 50% of the EBITDA impact from the U.K. tax increase, as it revealed in the FY 2025 earnings.

The savings will come across the cost of sales, marketing and operating expenses.

Entain expects the largest opportunity to come from operating expenses. The company has already taken measures, including eliminating 500 roles and implementing product and technology efficiencies, which Entain expects will also reduce capital expenditure.

This isn’t defensive cost-cutting or a reduction in investment. It’s capital reallocation,” Snape said. “We’re freeing up cash to reallocate exclusively into high-returning growth opportunities.”

At the same time, Entain does not intend to simply cut its way through the higher-tax environment. Snape said overall marketing spending is expected to increase this year, despite the company spending less than initially anticipated during H1, as it looks to maintain momentum into 2027.

Entain Sees Opportunity as UK Market Adjusts

The combination leaves Entain in the unusual position of absorbing a substantial increase in its own tax bill while arguing the same change could strengthen its competitive position.

The company believes its scale and diversified operations leave it better placed to navigate the higher-tax environment than some competitors, according to CEO Stella David:

The strength and diversification of Entain means we remain well positioned to capture potential opportunities as the wider market adjusts to the higher tax regime.”

Entain has repeatedly framed the tax increase as both a financial headwind and a potential competitive opportunity. The company described the higher tax regime as a near-term challenge for the sector. Still, it said that its current momentum positions it to continue gaining market share.

The U.K. and Ireland remain Entain’s largest markets, accounting for more than 45% of group revenue. That excludes the Central and Eastern European operations, which the company is discontinuing.

Entain H1 Financial Snapshot

Entain’s NGR increased 5% on a constant-currency basis, while underlying EBITDA fell 2% year over year to £479 million. The company said the stronger NGR was more than offset by the increase in the U.K. online gambling tax.

The group reported a loss after tax of £11.4 million, an improvement of £74 million from the previous year. Adjusted diluted earnings per share fell 19% to 20.3 pence, reflecting lower EBITDA and BetMGM joint venture income, as well as a higher effective tax rate.

The U.K. and Ireland were among the strongest areas, with NGR up 8% on a constant-currency basis. International NGR grew 3%, including online growth of 13% in Australia, 28% in Spain, 21% in New Zealand and 11% in Canada. Brazil declined 25%, largely reflecting unfavorable sports margins.

Entain ended June with £3.6 billion in net debt and leverage of 3.1x. The company declared an interim dividend of 10.3 pence per share, up 5%.

For 2026, Entain maintained guidance for 5% to 7% online NGR growth at constant currency and £910 million to £960 million in group EBITDA, excluding BetMGM parent fees and discontinued operations.