An industry with a lot at stake

Despite uninterrupted revenue growth since 2020, the gambling sector continues to struggle on the stock market. A look at why.

Who will win the Football World Cup taking place in the United States, Canada and Mexico from 11 June to 19 July? Brazil, Germany, Switzerland, or another country? Betting has already begun – and there will be plenty of it. “In the gambling sector, we’re seeing a World Cup effect, with stakes rising by as much as 10%,” notes Johanna Jourdain, equity analyst at Oddo BHF. “This type of major sporting event remains a significant driver of betting activity for the sports betting industry.” More broadly, 2026 is shaping up to be an exceptional year for the gambling sector as a whole. Alongside the World Cup, this year features three Friday the 13ths, compared with just one in both 2025 and 2027 and a longterm average of 1.72 per year.

This is set to boost revenues in a sector that is not experiencing a downturn. Since the pandemic, gross gaming revenue has continued to grow, rising from $424 billion in 2020 to $758 billion in 2025, according to the latest figures from specialist consultancy H2 Gambling Capital. “The gambling industry is a growing, resilient and defensive market,” continues Johanna Jourdain. “It is not dependent on economic cycles. Wagers have been rising year-on-year since 2021, even in times of crisis.”

A godsend in these times of high geopolitical tension. According to H2 Gambling Capital, the sector’s gross revenue – that is, players’ losses – is expected to exceed the symbolic $1 trillion mark by 2030, representing an increase of over 140% over the course of 10 years. “The main driver of this growth is the boom in online gaming and betting,” notes H2 Gambling Capital. While this sales channel generated just 20% of the sector’s revenue in 2015, it accounted for 41% in 2024 and is expected to become the industry’s primary source of revenue by 2029 (50.3%).

However, physical sales are not in decline. “The sector as a whole is on the rise,” continues Johanna Jourdain of Oddo BHF. “Digital sales are growing at 5% to 10% a year, while physical sales are expanding more slowly, at 0 to 5% annually.” Across all distribution channels, casino gaming (casinos, slot machines, bingo, etc.) will remain the industry’s largest category. It is forecast to generate $546 billion by 2030, accounting for 53% of total gross revenue. Betting (horse racing and sports) will represent 30% of this total, with lotteries making up the remainder (18%, or $181 billion in 2030). “Apart from horse racing, which is showing a slight decline, all segments of the gaming industry (casinos, sports betting and lotteries) are growing,” notes Jourdain.

Despite these encouraging prospects, most gambling companies are facing particularly difficult times on the stock market. Among the major European operators, France’s FDJ United has seen its share price fall by nearly 30% over the past year (as of the end of May). British group Entain is only marginally better, down 28%, while Sweden’s Betsson AB has fallen 50% and the Irish firm Flutter Entertainment has dropped 60% over the same period. Only a few niche players seem to be faring well, such as Swedish firm Evolution AB, which develops software for online casinos (e-casinos) (+5% over the past year). Across the industry as a whole, the BETZ Sports Betting & iGaming ETF, which brings together the sector’s leading global players, is stable year-on-year (-0.61% as at 31 March) and down 9.24% over five years.

The main reason? Several European countries – notably France, the Netherlands, the United Kingdom and Romania – have recently tightened their legislation and/or increased taxation on gambling. Since 1 July 2025, for example, the French Ministry of the Economy and Finance (Bercy) has raised the tax rate on gambling stakes from 11.2% to 11.9%. The same applies in the United Kingdom: since 1 April 2026, taxes on online casino games have risen from 21% to 40%, and those on online betting will rise from 15% to 25% in April 2027, with the exception of British horse racing bets.

In the 2025 financial year, for example, the tax increase cost FDJ United more than €50 million, and the company expects additional costs of nearly €90 million in 2026. This is enough to erode the margins of the French company and its competitors and weigh on their share prices. So much so that many analysts believe certain shares are now undervalued. In March 2026, for example, the German investment bank Berenberg deemed the fall in Entain’s share price ‘unjustified’. Johanna Jourdain, who covers FDJ United, also considers the French company to be “undervalued” although “this valuation level also reflects the regulatory risks weighing on the sector”. Is this the right time to take a position? “This is a sector where investors cannot take a position blindly. There is no guarantee that tax increases are over. In indebted countries, governments are seeking to raise revenue, and in this context, gambling companies are prime targets,” says Jourdain of Oddo BHF. “It is therefore too early to claim victory and say there will be no further taxes. Regulations can always change.”

At the risk of killing the cash cow? In a scathing column published on 1 April 2026, the CEO of the British group Entain, Stella David, expressed alarm at the tax hikes: “It’s a watershed moment for the sector. The increase in Remote Gaming Duty [...] was designed to bolster the public purse. But by nearly doubling the tax on regulated firms to 40%, the Government is undermining the viability of regulated gambling operators that pay UK taxes, employ thousands, invest in UK sport, and uphold world-leading player safety standards – just months before a World Cup that criminal networks are preparing to exploit.”

“The rise in illegal betting is the argument put forward by the gambling industry to limit regulations,” notes Dr Olivier Simon, a consultant at the Centre for Problem Gambling at the CHUV. “And it is true that this is a problem we see with other addictions, such as tobacco. If regulations become too restrictive or the product too expensive, customers turn to the illegal market.” In 2024, a study conducted by KPMG on behalf of the Swiss Casino Federation (FSC) estimated that operators without a Swiss licence already held around 40% of the Swiss online casino market. For Stella David, CEO of Entain, the figures in the UK are also very worrying: “The situation is dire. Illegal gambling is already booming in the UK, now accounting for around 10% of the market, following strong growth in recent years.” Globally, the United Nations Office on Drugs and Crime (UNODC) predicts that the illegal market could, by the 2026 World Cup, surpass the regulated sector in total volume. “Without swift action, the World Cup will be the single largest recruitment drive for criminal betting networks in history,” continues Stella David.

Faced with this threat, the legal industry has embarked on a major consolidation drive. Irish conglomerate Flutter Entertainment, for example, acquired Canadian firm The Stars Group (TSG) in 2020 in a deal valued at between $6 and $7 billion. The latter had itself acquired British firm Sky Betting & Gaming in 2018 for $4.7 billion. Meanwhile, the French group FDJ United took over Swedish rival Kindred in 2024 for €2.5 billion. And that’s not all: Greek firm Bally’s Intralot has just announced the acquisition of its British counterpart Evoke. “The gambling sector will continue to consolidate,” says Johanna Jourdain, “because being a major player active across multiple markets helps to limit the risks associated with tax increases in any given country.” At the end of the hand, the highest card wins the pot.