For a while now, online gambling operators in the UK have benefited from lower tax rates compared to their peers in other countries. Sadly, this tide is about to change as the British government and other concerned bodies have initiated several discussions and polls about increasing the tax rates for this sector.

Although not yet implemented, this proposed tax reform is already taking its toll on the industry. In the past few weeks, we’ve witnessed shares in major gambling companies listed on the FTSE have fallen by more than £2bn. And with unpleasant events like this already happening, chances are that you expect this tax reform will wreck the gambling industry. However, it is important to note that this dynamic industry has survived several regulatory challenges right from its inception in 2005 and has been able to access new opportunities, despite these challenges. So, join us as we unfold what these tax reforms could mean for the industry and the new opportunities that might evolve in its response.

Current Shape of the UK’s Gambling Landscape

Over the last 19 years, gambling in the UK has gained considerable traction. This sector has reshaped the society and the economy in no small way. And as you know, this wouldn’t have been possible without the advancement in technology.

In addition to technology, online gambling also became a thing when the global pandemic struck in 2020. These left punters with no other choice than to head onto virtual gaming platforms, as physical gambling facilities were shut down. Now Britons can gamble almost anywhere and at any time of the day via online casinos and sports betting sites. This shift resulted in the industry becoming a multi-billion Euro industry. It also amplified the discussions about regulation and taxation, as the government had to ensure a fairer playing field for both consumers and operators.

More heated debates around tax reforms continue to arise, with proponents arguing that increased taxation could help fund the country’s purse as the UK is currently facing a £22bn fiscal shortfall. While detractors warn of the havoc such policies could wreak on both operators and consumers. And if you’re quite observant you would have noticed that as these discussions go back and forth, there is a natural inclination towards the subject of responsible gambling and consumer protection. So let’s get right into it and see how operators can do something about this subject for their advantage in hard times like looming ahead.

The Growth of Responsible Gambling and the Protection of Customers

It’s very obvious that the UK Gambling Commission is very big on consumer protection. And with casino gaming constantly being linked to high rates of harm, with fiscal costs estimated at over 1 billion, they may be left with no choice but to enact stricter policies like the increase in taxes and gambling duties. This tax increase will also be necessary in strengthening the UK public finances which according to the UK economic forecast from Allianz Trade are currently weak.

But surprisingly, this is also a window of opportunity for companies to start showcasing their commitment to responsible gambling practices. Their commitment to this course has to become visible to all in terms of the extra money they invest into responsible gambling campaigns, enhanced education for players, and a sophisticated web of support for those needing assistance. And of course, you will agree with me that even as the discourse on tax reform continues, the public will be more than willing to support any brand that prioritizes consumer safety.

Opportunity for Innovation

Change often spurs innovation, and the UK’s gambling sector is about to experience this. While operators prepare themselves for ensuing changes in tax policies, it will interest you to know that many are finding ways to reinvent themselves and take a step toward innovation.

For instance, we’ll be seeing more operators integrate blockchain technology to promote transparency and build customer trust. Thus helping them meet the regulator’s expectations by building consumer trust.

Beyond that, it will also facilitate faster user transactions, weed out fraud, and reduce operational costs which have been tagged as the “high harms” associated with the industry. Consequently, this technology would, to an extent, reduce the heaviness of taxation.

Also, looking from a broader perspective, you can tell that online casinos are already partially engaging in the vital task of listening to their users and making innovations. A good example of this is the prominence of live dealer games, which have taken traditional gambling experiences online.

Gambling Operators Can Tap Into New Market Segments

One of the opportunities emerging from the proposed tax reforms is the potential for casino operators to tap into new market segments or embrace those segments they’ve previously abandoned.

Now let us explain what this means:

As the government fixes things in terms of oversight and regulation regarding responsible gambling,  casino operators who previously couldn’t reach certain markets because of their aversion towards legal and licensed gambling systems will begin marketing the benefits of legalized and licensed platforms through several avenues.

And doing this will attract the younger demographic who seem to want safer gambling. With customized marketing and a user-friendly experience, operating companies can connect well with the next generation of gamblers.

They can even go a step further by organizing educational outreaches and loyalty programs, as these are bound to catch the eye of these tech-savvy users. Another opportunity for operators would be inclusivity. Platforms can tailor their offerings towards a diversified audience. All they will need to do is simply recognize players’ needs in terms of accessibility or culturally resonant gaming.

Cooperation Between Operators and Regulators

More than ever before, gambling operators need to build synergies with regulators in deciding the fate of the industry. Proper discussions have to be made about frameworks that balances companies’ growth with consumer protection. Additionally, close collaboration with mental health organizations, treatment providers, and regulators will set measures that will deliver high standards for the superior future of gambling here in the UK.