UK Casinos May Cut RTP: How Operators Can Cut Costs After Tax Hikes

The UK gambling tax hikes have featured in so many of our news articles, and it is easy to tire of the woes and headaches that they are causing operators. But there is no understating how much of a structural shock they have received through the nearly doubled tax duties, and compliance with far stricter compliance requirements, it compresses their margins significantly. This cannot be contained by the operators alone, and will spill out onto players. Drastic measures have already been taken by both smaller and bigger brands. But now the whispers indicate they may think about cutting RTP on slots.

That itself could turn away players en masse, as RTP ultimately determines the value of the slot machines. Lower RTP effectively reduces your chances of winning, and can easily kill your appetite for slots play. This is not as hidden behind the scenes as skimming more juice from sports bets, or tweaking blackjack payouts to favour the house. Slot machine RTPs are displayed at online casinos, and they are crucially important for some slot players who want to pick higher value titles.

So here, we will look at the practicalities and risks of this potentially happening. But not to villainise casino operators too much, we will also check out the different options they have for cutting costs, and some of the main trends in the UK (and global) digital casino gaming.

Tax Hikes Context

The UK gambling tax for online casino operators was 21%, categorised as Remote Gaming Duty, and from April 1st, it was increased to 40%. Online casinos were not the only ones impacted, as the UK Autumn Budget 2025 also raised the duties for sports betting (15% to 25%), but it abolished landbased bingo duties and kept horse race betting at the 15% base rate. In the wake of the hikes, major firms shut high street betting shops, Flutter announced it would relocate Sky Bet to Malta to save on corp tax and overhead duties, and Evoke is currently entertaining bids to sell William Hill and reduce its debt.

All gambling operators are affected by these changes, and so too will the product they are offering to players. The UKGC has taken the time to tighten regulations with affordability checks, stricter player compliance, and hitting gambling promotions with stricter laws. All these together with the tax hikes have effectively created a new era for UK online casino gaming, and now operators must tread carefully to stay within the regulations. All while protecting their margins, and doing what would hurt all parties involved – scaring players away to the black market.

Can UK Operators Lower Slot RTP

There is no official statement or public announcement confirming that UK operators are actually going to lower the RTP on their slots. It is a hypothetical, but one that is unfortunately gaining a lot of traction, as it is the one area where operators can definitely protect their revenue.

It is easy to implement, and for casual gamers or anyone new to slots, it may pass completely unnoticed. Lowering the RTP can be done by tweaking the slot algorithms, or leaving them intact and tampering with the pay tables to slightly reduce the payouts.

Slot RTP is displayed at most UK online casinos, and so eagle-eyed gamers will notice if their favourite games suddenly have a different RTP. Not in the slot machine gameplay itself, but they will see different RTP values in the game description. This can be done slyly, just dropping a few decimal points, and that may be enough. Such as reducing a 96.50% RTP game to 96.20%. But it can still shake trust and upset players.

Potential Backlash and Risks

You wouldn’t start losing more money or failing to land bigger payouts immediately. Slot machines don’t run that way. It just means that in the long run, the games would pay out slightly less. It’s a hard buzzkill for anyone who enjoys a good game of slots online.

But what’s more, it can also kill the joy of playing these games, as players lose trust and may stop playing these games entirely. Either looking for other games, or looking for other sites that can provide the same games, but with the old RTP rates.

Alternative Cost Saving Schemes

Though, again, lowering slot machine RTP is still just a theory here. It is gaining a lot of media attention because of the potential backlash of players, and the risks of losing these customers to the black market. But it is not the only theoretical option out there for licensed casino operators.

If you were a casino operator, with an online casino in the UK and an existing base of players, there are other strings you could pull. Each has its own benefits, but there may be initial investments required, or controversial decision making that could also upset your base audience.

Cheaper or In-House Games

These are two different options. One is to simply pick cheaper games. Generally, slot machines are the cheapest games to run, as they don’t require much maintenance and the setup is pretty straightforward. Live casino games, on the other hand, are the most expensive. These need to be conducted with real dealers, hosted in real life casinos or studios, and streamed live to a player’s screen. All that costs money – money that can be saved by simply not having as many live games.

The second part to cheaper games is to pick games from smaller game studios, and not big brands. The bigger companies like Pragmatic Play, Evolution, Microgaming/Games Global, and so on, can all command larger deals for their games. Their games are more well known, and will bring in more players. But as an operator, if you can source games from lesser known studios that can deliver better deals, you can cut corners. The best option, though, is to invest in your own in-house game development studio. Caesars did this last year with Empire Creative, creating their own Originals. You don’t pay any supplier deals, and cut down on third party tech or stack solutions.

Supplier Deals and Sponsorships

If an operator doesn’t want to throw out their most popular games or cut back on live games, they will have to find a workaround with the supplier deals. These partnerships benefit both the operator (who can serve the games) and the software providers (whose games reach more players), but operators tend to pay a cut of the profits for the games. Or, they have to pay fixed fees to secure the rights to provide the games. Renegotiating deals carries more leverage if more operators get on board and try to redraw the line with game vendors, but this comes at the expense of the game vendors’ profits.

Where scaling back on expenses is concerned, there is also the example of cutting back on sponsorships, marketing campaigns, and other promotional content. A good example was Coral recently announcing it would no longer sponsor the Cheltenham Festival. Or, the end of front of shirt gambling sponsorship of Premier League clubs – but this was done voluntarily by the league itself, and not the operators. Bigger brands are in a better place to do this, as they already have established names and can win players over based on those reputations. Smaller or newer UK online casinos would struggle without these important marketing devices. They do need to build brand visibility and trust, after all.

Expanding into Other Verticals

The industry is going to go through a compression phase, and the competition is going to become a lot tighter. One interesting example of an operator not buckling but turning the playbook and investing in their product is Flutter. They decided to double down on the Tombola bingo platform, and relaunch the Tombola Arcade gaming app. The goal is to expand their catalogue of products, reaching new customers and providing more flexible options for their existing customers.

Expanding into other verticals involves casino operators exploring bingo, sweepstakes style products, skill based or arcade games, peer to peer games, and poker ecosystems. For bookmaker operators, it can involve exploring more fantasy sports products, peer betting exchanges, and alternative betting products.

Though expansion can happen in at a B2B level as well, not just facing customers. For instance, casino operators can explore the practicalities of launching their own white-label platforms, licensing for tech infrastructure, and developing player management systems or single-wallet ecosystems. They can provide these services, alongside their B2C casino gaming products, to open new streams of revenue.

Looking Beyond the UK

And just to not rule out any option, operators with more resources and influence can think about the opportunities outside the UK. The UK is the core market for many of the UKGC licensed online casinos, and it is a massive market. But the strict rules, tight profit margins, and higher competition make it a difficult place to run a business. Therefore, as an operator, you could think about taking your services abroad, making the UK a Tier-1 target, but not the only market you aim to hit.

The natural extension would be Europe, although the UK-licensed casinos don’t really have any passporting advantages within the EU post-Brexit. So expanding towards the continent either requires partnering with local providers or obtaining the licences yourself, either in offshore jurisdictions like Malta, or in the countries you aim to target. This requires a huge investment of resources, and renewed compliance checks, creating new financial frameworks, and salvaging as much of your existing UKGC-facing infrastructure to meet EU standards as possible.

Key Takeaways

It is easy to navigate between making a profit, paying duties and staying compliant. The regulator and the tax authorities’ worst nightmare would be for UK companies to eventually fold, withdraw from the UK, and see the players turn to illegal alternatives. This would undermine the UKGC’s player safety rules, hit the Government’s revenue through the gaming duties, and see the UK market cripple from overregulation.

Yet it is a possibility. There is only so much wiggle room for operators right now, and while the UK market is massive, it is not going to be easy to maintain growth. Operators can look to cut corners at the player’s expense, rethink their infrastructural financial plans, expand into other products for alternative revenue streams, or think about targeting countries beyond the UK. Time will tell how they react, and whether or not there will be any concessions from the authorities’ side. But historically, the UK is not one to back down on tough legislation, and operators will need to seriously think about their strategies if they are to stay afloat in this market.