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Tombola Launches Arcade 2.0 Cross-Vertical in Tense UK iGaming Market

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Tombola, founded in 2006, celebrated its 20th anniversary with the relaunch of its Arcade app. The Sunderland-based company is a well-known online bingo provider in the UK, which was acquired by Flutter Entertainment in 2021 for £402 million. This venture into arcade games, is not Tombola’s first experiment with the casino and arcade style vertical. It is a rework on a product that Tombola has had since 2016, as Flutter looks to bolster this additional vertical and strengthen Tombola’s position in the domestic market.

Arcade 2.0, as it is dubbed by Tombola, is not just a random expansion. It comes at a time when the UK iGaming scene is shifting and acclimatising to the impacts of the Remote Gaming Duty hikes. While physical bingo providers have benefited, and their gaming duty has been abolished, it is not the same for online bingo operators like Tombola. Their products count as remote gaming, meaning Tombola will also feel the brunt of the 40% gaming duty. But instead of scaling back or reducing their offering, Tombola is pushing straight ahead.

Tombola’s Arcade 2.0

The Tombola Arcade brand has been around for a decade now, offering casino-style games, variants of bingo, and unique instant win titles. Arcade 2.0 has reinforced the app with innovative new games, designed by the in-house games studios instead of being sourced from external game vendors. The main offering here is slots, or Spins as they are called on the gaming app. These look and feel the same as slots, using the same design principles and rules that slots players know well. Beyond that, Tombola has blackjack, roulette, scratch cards, bingo variants, puzzle games and bubble shooting games, all of which you can play to win real money. All are RNG games, using provably fair to play algorithms.

So it is essentially a mini-casino of sorts, with fresh in-house Original games and some scratchcard and RNG arcade games to add variety. Tombola also announced that the maximum win in games has also been tweaked. Before, you could win up to £2,000 as a maximum payout from the games, but now that limit has been increased to £10,000.

The deposit limits still remain lower, at just £500 instead of the £5,000 you can make at UK licensed online casinos. Though the Tombola arcade vertical also has to comply with the stringent vulnerability checks and potentially the questionable Financial Risk Assessments that the UKGC may implement.

How Alternative Games and Verticals Fare with UKGC Laws

Because they fall under the Remote Gaming bracket of the law, technically classifying these types of platforms alongside online casinos and online bingo sites. That means, the arcade gaming app has to follow ID-verification KYC protocols, monitor your spending if you exceed a net £150 in deposits within 30 days, and also adhere to the strict RG and promotional offer laws. While this particular arcade app, the Tombola Arcade, does have jackpots, the stakes are generally lower than you would get at online casinos. So there is less chance of you flagging up risky behavior or finding yourself on the receiving end of some financial intervention enforced by the UKGC.

The laws affecting the promotions, namely that they cannot be as widely advertised and that they have to be scaled back (max 10x wagering requirements, no cross-vertical promotions, and others), has led to a great scaling back in the UK iGaming industry. Offers are smaller and less frequent, and VIP programs are slowly becoming a rarity, rather than a standard norm at online casinos.

Flutter Strengthening Tombola’s Presence

Flutter acquired Tombola for £402 million back in 2021, marking the corporation’s first online bingo operator. You may have heard the name before, Flutter is a major entertainment company that owns some of the world’s biggest iGaming and sports betting brands, including:

  • FanDuel
  • Paddy Power
  • BetFair
  • SkyBet
  • PokerStars
  • AdjaraBet
  • SportsBet
  • Junglee Games

Tombola is headquartered in Sunderland, where it was founded, though it also has a satellite office in Gibraltar. It has multiple iGaming licences, including those in Spain, Portugal, Denmark, Sweden, the Netherlands, and Italy. Italy is a market that Flutter expressed strong interest in recently, especially since its gambling reforms.

The Italian gambling authorities scrapped the old licence framework, whereby operators could run skin sites, for a one site per licence system. The high fees and limited licence availability effectively culled the opportunities for smaller operators, which opened an opportunity for Flutter to become a main player in Italy’s iGaming sector. It combined Tombola with Sisal, bringing UK online bingo products for the Italian market, and reinforcing Tombola’s international presence.

Back in the UK market, however, not all Flutter brands have received the same upscaling as Tombola.

SkyBet Relocation and Paddy Power Closures

Even before the UK remote gaming duties were raised, and there was only speculation – not if but by how much – the gambling tax would be, Flutter was already preparing. It closed down Paddy Power high street shops, a move echoed later by Ladbrokes and William Hill, in efforts to reduce operating costs and save money ahead of the duty hikes.

Last year, Flutter also announced that it would be relocating SkyBet to Malta. The statement made it clear that this was not a market exit, and that SkyBet would still be available in the UK. However, the base of operations was changed to cut some maintenance, staff and operational costs – as well as skip some of the corp tax.

It is quite a tense time to be an iGaming operator in the UK, as the market shifts to prepare for the 40% tax duty, which was just 21% before. And on top of that, the UKGC laws that tighten bonus and promotion rules and enforce player protection measures make the market even more difficult.

Cross-Market Strategies to Balance Higher Duty

The fears are that this overregulation will force a massive drop in the quality that UK customers have become familiar with, and result in some gamers turning to the black market.

But Tombola, or Flutter, is questioning that narrative with a very intriguing sideways step. Boosting platforms by adding more verticals is a great way for operators to retain and possibly expand their customer base. It is not just about launching a new app that focuses on sports, casino games, arcade games, or more specific niches like scratchers, crash games, live games, or mobile-first games. All of these niches and verticals are affected by the imminent tax hikes.

The idea here is to provide more options for players, potentially stock up on exclusive or unique games to compete with rival companies, and explore verticals that have more player-centric engagement features.

Popular niches, and microniches within iGaming (and sports betting, for that matter), can include:

The point is to diversify, and find out which verticals and microniches gamers respond to best. Also, where possible in both the financial sense (with respect to margins) and the UKGC laws, to find options that are cheaper or more resource effective to run.

tombola flutter arcade game uk gambling igaming tax vertical market sisal

How This Can Impact the UK iGaming Sector

It is difficult to say where the UK igaming market is heading right now, because there are many mixed signals and operators have not yet felt the impacts of the remote gaming duty raises. In fairness, the impacts will come from April of next year, but they don’t necessarily need to pay it all out straight away, as they can do this in quarterly installments throughout the year. Right now, we can only guess the financial burdens that they may face – and that depends a lot on the spending habits of the UK customers.

Which, in turn, is impacted by the quality of the market. Something that is continuously put under pressure by the UKGC, which rolls out new player safety and responsible gambling measures at a faster rate than ever before. Integrating new verticals into existing platforms, using proprietary in-house developed games, and looking for trending games are all hugely positive moves. Flutter has a fallback here with Sisal in the Italian market, where it can try to offset any shortcomings in the UK margins, but it sends out a signal to other UK iGaming operators.

If you can’t beat the remote duty, or effectively fight the UKGC’s crusade for player safety, then you have to look for alternative ways to keep in business. The iGaming market is maturing, and there will definitely be casualties in the UK, but the brands that can upscale and diversify would do well to battle the hardships that are to come.

Daniel has been writing about casinos and sports betting since 2021. He enjoys testing new casino games, developing betting strategies for sports betting, and analyzing odds and probabilities through detailed spreadsheets—it’s all part of his inquisitive nature.

In addition to his writing and research, Daniel holds a master’s degree in architectural design, follows British football (these days more out of ritual than pleasure as a Manchester United fan), and loves planning his next holiday.