PwC: iGaming growth in Europe slows down due to tax hikes

PwC has prepared a report for the Betting and Gaming Council (BGC) which highlights a worrying trend: in European countries, increased regulation and higher gambling taxes are leading to slower market growth, an exodus of players to unlicensed venues and less effective tax revenues.

The UK in the context of Europe

PwC estimates that the UK's tax and regulatory model is now close to the European average. Following the increase in the Remote Gaming Duty rate in 2019 - from 15% to 21% - the country has joined the ranks of «resilient» markets.

Current tax rates in the UK:

• Racing - 25%
• Casino - 21%
• Sports betting - 15%

Market growth and tax revenues

PwC points to a direct link between high taxation and slowing industry growth:

• In Western European countries where taxes were raised in 2019-2024, the average annual GGR growth was only 6%
• Where the tax burden was maintained or reduced, growth reached 17% per year
• In Germany, the online slots and poker turnover tax (5.3%) resulted in a 50% reduction in tax revenues and a reduction in the number of available games

Overall, markets with low tax rates showed growth of 13% per year, while high-tax jurisdictions showed growth of only 9%. In the Netherlands, where the tax increased from 30.5% to 34.2%, authorities forecast tax collections to fall by 9% despite the rate hike.

Operators' response

• 13 out of 19 companies cut bonus budgets
• 15 out of 21 reduced advertising expenses
• In France and Spain, bonus volume fell by almost 47% following the introduction of new advertising restrictions

Players go into the «shadows»

• Between 40% and 53% players said they were willing to switch to unlicensed sites
• In France and Germany, about half of online gamblers already bet on offshore venues
• The most sensitive to the reduction of bonuses and payouts was the audience with large stakes - the top 5% players