Entain is facing a significantly higher tax bill in the UK, but the owner of Ladbrokes and Coral believes the new regime could ultimately create an opportunity to strengthen its position in the market.
The company reported solid growth across several key markets during the first half of 2026, while also warning that the full financial impact of the UK’s higher Remote Gaming Duty will become more visible in the second half of the year.
UK tax increase hits profits
The UK’s Remote Gaming Duty increased from 21% to 40% on 1 April 2026, creating an immediate cost for online gambling operators.
Entain absorbed an estimated £56 million impact on H1 EBITDA as a result of the higher rate. However, the first-half figures only include three months under the new tax regime, meaning the company expects the pressure to increase during H2.
Despite this, Entain said it has been gaining ground as competitors adapt to the new market conditions.
UK online net gaming revenue increased 13% during the first half, with gaming revenue also up 13% and sports betting revenue rising 11%.
The company’s retail business also continued to outperform the wider market, recording its eighth consecutive quarter of outperformance.
Competitors adjusting to the new environment
Entain’s management believes the higher tax burden is creating disruption across the UK market, giving larger operators an opportunity to gain share while competitors reconsider their spending and operating strategies.
Chief Financial Officer Michael Snape said the company had been able to take advantage of the changes.
“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.”
However, Entain is not assuming that the strong performance recorded during H1 will automatically continue.
Snape pointed to uncertainty around the competitive environment in the second half of the year, which is one of the reasons the company has maintained rather than upgraded its full-year guidance.
Cost savings to offset higher taxes
Entain has already introduced a series of measures aimed at reducing the financial impact of the tax increase.
The company previously targeted measures capable of offsetting around 25% of the additional tax cost during 2026. It is now targeting £100 million in annualised net savings by the end of 2027, which would offset at least half of the expected EBITDA impact from the UK tax increase.
The savings programme covers areas including operating costs, marketing and cost of sales.
Entain has already eliminated around 500 positions and introduced product and technology efficiencies, with the company expecting some of these changes to reduce capital expenditure as well.
However, management stressed that the strategy is not simply about cutting costs.
Instead, Entain plans to redirect resources towards areas it believes can generate stronger returns, while continuing to invest in marketing.
Strong performance outside the UK
The company’s growth was not limited to Britain.
Online NGR in Australia rose 13%, while Spain delivered particularly strong growth of 28%. New Zealand increased 21% and Canada was up 11%.
Brazil was more challenging, with NGR falling 25%, primarily due to unfavourable sports betting margins. Despite the decline, Entain said it had maintained its position in the market.
The company’s international performance highlights the importance of its geographical diversification as it navigates the UK’s changing tax environment.
Entain keeps full-year guidance unchanged
For the first half of 2026, Entain reported 5% growth in NGR at constant currency, while underlying EBITDA declined 2% year-on-year to £479 million.
The company reported a loss after tax of £11.4 million, although this represented an improvement compared with the previous year.
Entain ended June with approximately £3.6 billion in net debt and leverage of 3.1x. The company also declared an interim dividend of 10.3 pence per share, representing a 5% increase.
For the full year, Entain maintained its forecast for 5–7% online NGR growth at constant currency and group EBITDA of £910 million to £960 million, excluding BetMGM parent fees and discontinued operations.
With the higher UK tax rate now applying for a full six months in H2, the coming months will provide a clearer picture of whether Entain can turn the industry’s increased cost pressure into the market-share opportunity it currently sees.