Tax Squeeze in Europe: Gambling Giants Pivot to Emerging Markets

The golden age of European online gambling appears to be reaching its twilight as major industry players set their sights on the West and South. What was once a stable home harbor for empires like Entain, Flutter, and Betsson is increasingly becoming hostile ground. The cause is a toxic mix of ever-stricter regulatory requirements and a tax burden that, in some countries, has crossed the line into unprofitability. While revenues in Europe stagnate, newly regulated markets in Latin America and Africa are enticing operators with dynamic growth potential.

Entain serves as a prime example of this development. The company, which owns prominent brands like Bwin, faced a statutory pre-tax loss of approximately £557 million in FY25. Although underlying EBITDA rose to £1.16 billion, legacy charges and new fiscal frameworks in the UK are weighing heavily on the balance sheet. From April 2026, Entain absorbed a doubling of the Remote Gaming Duty from 21% to 40%. Such spikes can hardly be mitigated through efficiency alone, leading the company to confirm 500 job cuts globally in July.

Numbers and facts

The fiscal pressure is not just a British phenomenon. In France, taxation on Gross Gaming Revenue (GGR) has climbed above 59%. Italy has introduced license fees of €7 million for online concessions, and the Netherlands has increased gambling taxes three times since 2024. James Kilsby, Chief Analyst at Vixio, highlights the global shift:

"Prior to 2018, the regulated online gambling market was highly euro-centric but legalization of sports betting and iGaming in various U.S. states as well as the major markets of Ontario and Brazil has coincided with stricter regulations in European countries that has restricted growth in a number of cases." - James Kilsby, Chief Analyst at Vixio

By 2028, Vixio forecasts that regulated markets in the U.S., Canada, and Latin America will generate $56.3 billion. This would see the region draw level with or even surpass Europe. Entain has reacted by drastically reducing its exposure to markets in transition while declaring Brazil a "must-win" market. Brazil officially regulated its online market in January of the previous year.

Background

Beyond taxes, competition from new platforms is reshaping the business. So-called prediction markets are increasingly eating into traditional sportsbook volumes. Competitors like Flutter estimate that UK tax changes will reduce adjusted EBITDA by £240 million in FY26, a figure that could rise to £405 million the following year. Meanwhile, FanDuel has become the largest revenue driver for the group, emphasizing the geographic shift in priorities.

Betsson is also reporting records from Latin America. In Q2 2026, revenue there grew by 32% year-on-year, now accounting for more than one-third of total group income. CEO Pontus Lindwall is pursuing a long-term strategy, investing in B2C markets that are not yet profitable, firmly believing that today's pressure is the catalyst for tomorrow's growth. Alongside Latin America, Africa is emerging as a new frontier. Countries like Nigeria, Kenya, and South Africa attract interest with young, mobile-first populations. Vixio expects the African market to grow by about 48% between 2025 and 2028.

Why it matters for German players

For German customers, this global trend means that the domestic market is becoming less attractive for large operators, sharpening the focus on efficiency and strict compliance. In Germany, a rigorous regime has been in place since the 2021 Interstate Treaty on Gambling. This includes a cross-operator deposit limit of €1,000 per month and a €1 stake limit per spin on virtual slots. These measures are monitored via the central LUGAS system.

Since Germany taxes turnover rather than Gross Gaming Revenue (GGR), the margin pressure is similar to other European trouble spots. Players should ensure they only play with operators listed on the official GGL whitelist. Only these providers guarantee protection under German law and connection to the OASIS self-exclusion system. The migration of large corporations to distant markets could mean that bonus offers in Europe will shrink in the medium term, while aggressive marketing campaigns are launched in Brazil or the U.S.

What it means for GGL-licensed casinos

Casinos with a GGL license face the challenge of remaining profitable in a high-tax environment. While operators like Entain or Betsson increasingly earn their profits overseas, the German business often serves merely as a defensive market share play. The high regulatory cost of LUGAS and the tax on every single bet make it difficult to compete with the illegal black market from Curacao or Malta, which does not bear these costs. The GGL must therefore intensify its enforcement efforts to ensure that legal providers are not squeezed out by tax pressure, which would ultimately undermine player protection.