Easy target
UK operators fight a last ditch battle to head off a swingeing tax increase
Entain says the Treasury “understands” the potential damage of a tax hike.
In +More: Star Entertainment reaches Brisbane casino sale agreement.
Earnings extra: Entain, Evoke, Bally’s, Catena Media and more report.
Venture playground: Talking to Tim Heath about Yolo Fund II.
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Rearguard action
Get the message: The UK Treasury understands the concept of the black market being the beneficiary from increased gambling taxes and that the tax take “potentially goes to zero” as customers migrate across, said Rob Wood, CFO at Entain.
Wood was speaking as the operator of the UK-facing Ladbrokes and Coral produced its H1 earnings showing UK and Ireland revenues rising 10% YoY.
But those revenues would be impacted by tax increases being urged on the cash-strapped UK government by the anti-gambling lobby.
Easy like Sunday morning: On the Evoke H1 earnings call this morning, CFO Sean Wilkins acknowledged that the gaming sector was an “easy target” for a Chancellor and government “that needs some cash."
“The caveat is that increased tax beyond a certain point leads to black market growth, and black market growth leads to lower tax take.”
Wood said Entain was encouraging the government and the UK Gambling Commission to see a further “clamping down” of the black market as a surer route to increasing the tax take.
Taking the hit: Analysts at Jefferies said their base case remains for tax harmonization at 21% which implies a 2% hit to Entain’s EBITDA.
If the tax rate was pitched at 25%, the analysts believe the hit would be closer to 6%.
Investec said this morning when looking at Evoke’s H1 numbers that the main risk to the company’s forecasts is related to the potential tax increase.
“However, we doubt the UK government will do anything draconian, as any excessive increase in gaming taxes would likely backfire,” the team added.
Truth and consequences: CEO Stella David noted that proponents of increased gambling taxes should be “very cautious about the law of unintended consequences.”
She pointed to the example from the Netherlands where the head of the regulator, the KSA, admitted late last week that the tax hike from January had led to less gambling taxes being collected.
KSA chair Michel Groothuizen also noted that a financially driven measure such as gambling tax is “at odds with the policy objective of offering players more protection.”
Paying your way: David stressed that Entain employs 14,000 people in the UK largely across its retail estate. “Protecting the High Street is also very important,” she said.
Wood noted that Entain already pays over $50m to the government in taxes. “That’s a really important point,” he added.
“We're a great British company who generates huge amounts of tax for the government,” chipped in David.
Think or swim: The recent lobbying effort is being led by two thinktanks, the Social Market Foundation (SMF) and the Institute for Public Policy Research (IPPR), which have each issued reports within the last fortnight urging the government to more than double gambling taxes.
The IPPR also enlisted former Prime Minister Gordon Brown to pen an editorial in The Guardian last week that said an extra £3bn could be raised by raising most gambling taxes to 50%.
The cash raised would then be put towards programs to alleviate childhood poverty.
Wheels within wheels: Sources noted that a previous research report from the SMF arguing for betting taxes to fund addiction treatment was penned by then SMF staffer Aveek Bhattacharya. He has since moved on to be the head of excise at the Treasury.
Meanwhile, the head of the SMF is Theo Bertram, a former No.10 staffer during Gordon Brown’s tenure.
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Star reaches Brisbane deal
Star Entertainment shares soared by 23% on Tuesday after the company announced it had managed to reach an agreement to sell its half share in the Queen’s Wharf casino in Brisbane to the Hong Kong consortium it has been in talks with since March.
The deal is worth A$53m ($34.6m), of which Star has already received A$45m with the remaining A$8m due to be paid in November.
The statement said the deal had the unconditional consent of Bally’s and the billionaire Mathieson family, who are separately planning to take control of the company pending probity approvals.
+More
Wynn Macau has announced a $500m senior unsecured notes offering with proceeds designated for general corporate purposes, including debt repayment and funding expansion projects totaling up to $750m through the end of 2026.
Grid locked: Las Vegas has extended the deal to host F1 through 2027 at a cost of a combined $20m for the extra years of 2026 and 2027. The news comes ahead of the running of the third Grand Prix in the city in November.
Wherefore art thou, Romeo? Monday saw the grand opening of Penn Entertainment’s new Hollywood Casino Joliet in Illinois. The $185m property replaces the former riverboat property that operated on the shores of the Des Plaines River since 1992.
Going short: Following its earnings last week, short interest in DraftKings is at a 52-week high with a 16% increase in absolute short interest from a fortnight back, up to just over 7%.
Puts+takes
Jefferies reported that overall casino foot traffic in July was down -9.9% YoY and down -19.9% vs. 2019 levels. This traffic level was the second lowest YTD, representing a slight reversal of the stabilizing trends we’ve seen the last few months.
Earnings extra
Entain
Return to sender: With BetMGM now guiding to an adj. EBITDA profit in 2025, Entain CFO Rob Wood indicated both he and his counterpart at MGM Resorts, Jonathan Halkyard, were agreed that there was no need to keep excess cash in the BetMGM coffers. “After seven years of injecting capital into building BetMGM, we now expect some level of cash to be returned to [the] parents later this year,” he told the analysts on the H1 call.
See yesterday’s Earnings Extra edition (PRO subscribers only)..
Evoke
In line: Evoke reported what CFO Sean Wilkins said was a "rather poetic” revenues of £888m in H1, up 3% YoY with EBITDA more than tripling to $143m and with pre-tax losses being pared back significantly to £64.7m from £143m this time last year. The company said current trading was in line with FY25 guidance for revenue growth of between 5%-9%.
See the Earnings Extra edition to be sent later this morning. (PRO subscribers).
Bally’s
Silent running: Once again with no accompanying call, Bally’s said its revenues were bolstered by the North American interactive segment while the B&M business enjoyed a revenue boost from the inclusion of four Casino Queen properties following the merger of the two. Bally’s repeated that it will use the €2.7bn proceeds from the sale of the interactional interactive business to Intralot to repay a portion of its debt.
See the Earnings Catchup edition to be sent later today (PRO subscribers)
Catena Media
Not dead yet: By hook or by crook, Catena Media is gently feeling its way back to increasing its profitability, albeit still in very low single digits and after having to cut costs to suit its circumstances. Almost wholly focused on North America, the affiliate provider saw revenue fall 25% YoY in one of sports off-seasons with the company also suffering unspecified SEO headwinds.
See yesterday’s Earnings Extra edition PRO subscribers only).
High Roller Technology
Rock ’n’ roller: Revenue rose 20% YoY to $6.9m while adj. EBITDA moved into the black at $362k vs. a $931k loss in Q224, helped by optimized marketing and cost efficiencies. ARPU rose ~80% QoQ, while operating expenses and cash burn fell significantly. CEO Ben Clemes said the results “reinforce our belief in the business and its future prospects.”
See the Earnings Catchup edition to be sent later today (PRO subscribers)
DoubleDown Interactive
Supr-dupr: The social casino operator’s RMG unit, SuprNation, saw revenues leap by 96% in Q2 to $15.5m, helping to offset some of the decline in F2P and social casino gaming where revenues dipped by 14% to $69.3m. Total revenues were down 4% to $84.8m while adj. EBITDA dropped 11% to $33.5m. Recall, DoubleDown recently closed on the acquisition of social games developer WHOW Games for €55m.
See the Earnings Catchup edition to be sent later today (PRO subscribers)
Galaxy Entertainment
Surging: A strong Q2 2025 saw net revenue rise 10% YoY to HK$12bn (US$1.52bn) and an 8% sequential uplift. Adj. EBITDA rose 12% YoY to HK$3.6bn. Galaxy Macau drove results with Q2 net revenue of HK$10.0bn, a 16% YoY surge and up 9% QoQ, delivering adj. EBITDA up 20% YoY to HK$3.3bn. Macau market share rose to over 20%
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Venture playground
Funding news
Second time around: The P2P sports prediction market operator Novig has announced an $18m Series A funding round led by Forerunner, with participation from existing investors Y Combinator, NFX, Perceptive Ventures and Gaingels.
Novig was founded by Jacob Fortinsky and Kelechi Ukah and was originally a betting exchange before pivoting to prediction markets.
In April last year, it exited the regulated market in Colorado and by November had relaunched as a nationwide B2B prediction market.
It previously secured a $6m seed funding round in April 2023 led by Lux Capital.
Novig plans to use the new cash to expand coverage to additional sports and deepen its presence in existing markets.
The company will also launch new features, including leaderboards, group contests and head-to-head trading.
Additionally, Novig aims to support fiat on-ramps such as debit and credit card payments, launch a full-featured web app, and scale hiring across its engineering, product and growth teams.
Focus – Tim Heath on Yolo Fund II
A tribe called quest: Tim Heath, founder of Yolo Investments, says the new €100m Yolo Fund II – which has brought together a curated group of 23 investors to provide half the funding – underscores Yolo’s continuing ambition to back game-changing companies at the intersection of igaming, fintech and crypto.
Heath describes this network as a key differentiator. “We’re not just bringing capital, we’re building a tribe,” he says.
“This is about validation, certification, and creating symbiosis between our portfolio and the people who’ve helped shape the industries we’re investing in.”
A track record to shout about: Yolo Fund II has already deployed capital into 12 companies, including Dabble, ParlayPlay and Forever Network in the gaming space, as well as Kraken, Mesh, BoomFi and Syfe on the crypto and fintech side.
Heath says a further 10 investments are planned in the next 12 months, but notes that deal flow will be measured and highly selective.
“We only want 20 assets in Fund II,” he says. “This is a more mature stage of investing for us.”
“Fund I was about getting access and establishing credibility. Fund II is about doubling down on businesses with strong product market fit and the ability to scale – fast.”
Focus, people, focus: Heath is outspoken about what makes a venture backable, especially in a vertical such as online gaming where regulation, payment frictions and audience volatility can kill momentum. He believes founders need guardrails and sharp focus.
“It’s not a flaw to focus on a single vertical. But you’ve got to understand where your value lies,” he argues.
“Scattergun approaches don’t work,” he adds. “Startups that win are those with a deep understanding of their niche, strong entertainment value and a plan for how to move money fluidly.”
Now you’ve got my attention: He is equally candid about how startups should think about the structural shifts in gambling, away from traditional sportsbooks and towards “attention-first” mechanics such as pick’em formats, influencer-led activations and gamified finance.
“We’re seeing the whole world moving towards financial utility embedded in entertainment,” he adds.
“Whether it’s a crash game in Dubai or a fantasy sports product in the US, it starts with controlling money and builds out from there.”
“Crypto is going to change this industry. The money movement is the first piece, then the ecosystem develops around that.”
No ego: Heath also highlights the role of benchmarking data, saying Fund II is driven by more analytical assessments than ever before. “You remove the personal bias and can be harshly rational,” he says.
“We have real data from B2C and B2B to know what good looks like. And when we invest, we become clients. That reduces risk and aligns incentives,” he adds.
Yolo’s ambition remains global, but disciplined. The firm only invests in regulated or regulation-ready businesses and has little interest in “offshore plays that can’t get exits.” That pragmatism, coupled with an operator’s mindset, defines Heath’s approach.
“There’s no cap on upside in this industry, but we don’t just invest in hype,” he says. “We back companies that can survive scrutiny, ride the regulation wave and still deliver entertainment value.”
Growth company news
LEBOM: Former England and Chelsea captain John Terry has joined the football prediction app as both an investor and brand ambassador, marking a major landmark for the rapidly growing brand ahead of the 2025/26 Premier League season. Terry joins the business in a three-year deal, backing LEBOM’s mission to bring friends and fans together through private football prediction leagues, making the weekend’s games more social, competitive and rewarding.
Rabbet, a new P2P social betting marketplace, has officially launched on the App Store and Google Play. Rabbet allows users to connect and compete directly by creating and sharing their own custom lines with a transparent, socially integrated platform built for the fans.
Elantil has been chosen to power the platform of the latest iCasino new entrant Goatz.com, which is set to embark on a multi-jurisdiction launch by the end of 2025.
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