Regulators across Europe are converging on a stricter, more expensive compliance standard for gambling operators, and the smallest licensees are the ones failing to keep up. Britain’s authorised operator count has fallen every year since 2021, the Netherlands’ online gambling revenue contracted 18.5% in 2025 after a tax hike, and Curaçao has scrapped the cheap sub-license model that once let small operators launch for a few thousand dollars. None of this is accidental: it is what happens when AML and KYC obligations shift from a compliance checklist to a fixed-cost infrastructure problem that scales badly for small books of business.
Key takeaways
- The number of gambling operators licensed in Great Britain fell from 2,442 in March 2021 to 2,179 in March 2025, a decline every single year over that period.
- EY estimated the UK industry’s annual cost of running affordability checks alone at more than £125 million, a fixed cost that falls disproportionately on operators without existing compliance infrastructure.
- The Netherlands’ regulated online market shrank 18.5% in 2025 after gambling tax rose from 30.5% to 34.2%, with a further increase to 37.8% in January 2026, while the illegal market’s share of spend overtook the licensed sector.
- Curaçao abolished its master/sub-license system at the end of 2024, replacing informal, low-cost sub-licensing with direct Gaming Control Board oversight and a fixed annual fee structure near €47,450 for B2C operators.
- The EU’s new Anti-Money Laundering Regulation brings gambling service providers into a single, directly applicable rulebook from July 2027, removing the patchwork of lighter national regimes that smaller operators previously relied on.
Table of contents
What compliance now costs a casino
Casinos are classified by the Financial Action Task Force as designated non-financial businesses and professions, meaning
the FATF classifies casinos as designated non-financial businesses and professions (DNBFPs), which means AML obligations apply at the same standard as financial institutions
. In practice that means customer due diligence at onboarding, enhanced due diligence for high-risk players, and ongoing transaction monitoring with suspicious activity reporting are not optional add-ons but licence conditions, and
CDD at onboarding, EDD for high-risk players, and ongoing monitoring with suspicious activity reporting are all mandated
.
Building and running that stack is not simply a matter of buying an identity-verification API. In the UK,
EY estimated the annual cost of running affordability checks alone at over £125 million across the industry, covering technology upgrades, credit reference agency integration, and additional compliance staff
. Crucially,
that is before the levy, before the legal work, before the game redesigns
. Large operators can spread that outlay across millions of active accounts; a regional casino or a challenger sportsbook with a fraction of the customer base absorbs the same fixed engineering and staffing cost against a much smaller revenue line.
The asymmetry is structural rather than incidental.
Larger operators had compliance teams already in place, and absorbed the cost by spreading it across engineering and legal functions, while mid-market and smaller operators faced the same obligations without the infrastructure
. That gap is one reason the site’s macro-economics coverage increasingly treats regulatory cost as a market-structure variable, not just a line item on an individual operator’s P&L.
The UK: a market that keeps shrinking
The Gambling Commission’s own industry statistics show a market that has been contracting in operator count for years, even as revenue has grown. The table below tracks the number of licensed gambling operators in Great Britain at the end of each March.
| Date | Licensed operators | Year-on-year change |
|---|---|---|
| 31 March 2021 | 2,442 | 5.4% decrease on 31 March 2020 |
| 31 March 2023 | 2,343 | 3.0% decrease on 31 March 2022 |
| 31 March 2024 | 2,262 | Down 3.6% from the previous year and 12.3% below pre-COVID levels |
| 31 March 2025 | 2,179 | A 3.7% decrease from March 31 2024 |
That is a decline in every measured year, spanning a period during which overall Gross Gambling Yield rose. Fewer operators are now generating more revenue between them — the definition of consolidation. Enforcement data reinforces why smaller, thinly capitalised licensees find this environment hostile. Gambling Commission settlements for AML and social-responsibility failings have ranged from five-figure sums for small regional casinos to eight-figure penalties for multinational groups:
| Operator | Payment in lieu of penalty |
|---|---|
| Les Croupiers Casino Limited | £202,500 plus Commission costs of £14,794.62 |
| Shaftesbury Casino Limited | £260,000 plus Commission costs of £11,690.41 |
| Double Diamond Limited | £247,000 payment in lieu, plus £24,530.81 towards investigation costs |
| Netbet Enterprises Limited | £748,000 in lieu of a financial penalty |
| White Hat Gaming Ltd | £1,334,053.18 plus Commission costs of £9,816.63 |
| Caesars Entertainment UK Limited | £13 million in lieu of a financial penalty |
For a single independent casino such as Les Croupiers or Shaftesbury, a settlement in the hundreds of thousands of pounds represents a far larger share of annual turnover than a multi-million-pound fine represents for a listed group. Commentators tracking the UK’s post-2024 tax and regulatory changes describe this dynamic directly:
Britain risks drifting toward a European model dominated by a handful of heavily regulated incumbents operating “more like utilities or insurance companies,” and for challenger brands the result is fewer competitors, less innovation, more bureaucracy and a market that becomes harder to enter
. Industry analysts add that
larger operators generally have greater capacity to absorb increased duties and compliance expenditure, while smaller operators often operate with far thinner margins and less operational flexibility
.
The Netherlands: tax and channelisation squeeze
The Dutch market illustrates how tax policy and compliance cost compound each other.
The Dutch gambling tax rate rose from a baseline of 30.5% of Gross Gaming Revenue in 2024 to 34.2% on 1 January 2025, and climbed again to 37.8% on 1 January 2026
, with
an additional gambling levy of 1.95%, bringing the effective tax and levy burden close to 40% of GGR
. The regulator’s own data shows the effect: the Kansspelautoriteit reported that
online gambling revenues contracted by 18.5% following regulatory measures and tax increases, a stark reversal from 2024’s 4.9% growth rate
.
The number of licensed operators has barely moved —
the number of licensed operators rose slightly from 30 to 31 over the same period
— which on its face looks like stability. But channelisation, the share of total player spend flowing through licensed sites, tells a different story.
Channelisation fell from 51% at the end of 2024 to 49% in the first half of 2025, and the illegal market overtook the licensed sector in terms of operator GGR
. A market with a stable operator count but a shrinking legal revenue pool is one where the survivors are absorbing a bigger compliance bill against a static or falling customer base — precisely the condition that tends to force marginal, smaller licensees to exit at the next licence renewal rather than the moment their doors close.
Curaçao’s cheap-licensing era is over
Curaçao has historically been the entry point for small and early-stage operators because of its low cost and fast turnaround. That changed with the Landsverordening op de Kansspelen (LOK).
The National Ordinance on Games of Chance (LOK) came into force on 24 December 2024, the old master license system was abolished on 1 January 2025, orange seals expired permanently on 15 October 2025, and physical presence requirements became mandatory from 1 January 2026
. Licensing authority moved from four commercial master-license holders to a single state regulator:
the Curaçao Gaming Authority now issues licenses directly and records them in a public register, eliminating the former sublicense system
.
The cost structure changed with it. Under the new regime,
a B2C operator budgets a realistic first-year total of €75,000–100,000, including company formation, resident director, local office, server hosting, certification and legal support
, on top of annual state and supervisory fees. That replaces a system where sub-licenses could historically be obtained for a small fraction of that outlay through a master-license holder. The change was not purely domestic:
the Dutch government required this restructuring in exchange for pandemic financial aid
, tying Curaçao’s reform to the same international pressure driving stricter standards across Europe. For operators licensed there with legacy technology, the transition is compounding:
smaller operators licensed in Malta and Curaçao face steeper challenges, particularly those running legacy technology stacks that require substantial platform upgrades to support real-time transaction monitoring
.
The EU-wide reckoning: AMLR and AMLA
The most consequential change for the next two years is not a single country’s tax rate but a harmonising EU regulation.
The Anti-Money Laundering Regulation applies directly in all 27 Member States from 10 July 2027, replacing fragmented national rules with one harmonised set of customer due diligence, beneficial ownership and reporting obligations
, and it explicitly folds in gambling:
just as the earlier AML directives, the AMLR includes the providers of gambling services into the scope of obliged entities
.
A new supervisory body sits above national regulators.
Regulation (EU) 2024/1620 establishes the Anti-Money Laundering Authority, headquartered in Frankfurt, and AMLA became operational on 1 July 2025
. Its direct-supervision remit is initially narrow —
from January 1, 2028, it will directly supervise approximately 40 large, high-risk financial institutions across the EU
— but its rulebook and guidelines apply to every obliged entity, gambling included, regardless of size. For operators that relied on lighter-touch national transposition of earlier directives, the shift to a single directly applicable regulation removes that latitude. Analysts covering the transition expect the effect to fall unevenly:
the combination of tighter AML enforcement, stricter licensing requirements, and expanding responsible gambling mandates is creating a compliance cost squeeze that will likely accelerate market consolidation across the EU gambling sector throughout 2026 and into 2027
. Readers following our regional regulatory deep dives will recognise this as the EU counterpart to what has already played out in the UK and the Netherlands.
Why scale decides who survives
The pattern across jurisdictions is consistent: compliance and tax costs are largely fixed or semi-fixed, so they fall harder, proportionally, on operators with smaller revenue bases. This is the mechanical driver behind the acquisitions reshaping mid-market gambling brands. One legal analysis of the UK sector notes that
the UK iGaming sector has been consolidating for three years, with larger groups acquiring mid-market brands not just for their players but for their licences and their compliance infrastructure
, adding that pre-deal
regulatory due diligence has become one of the busiest growth areas in gambling law precisely because acquirers need to know whether the operator they are buying has a clean compliance record or a liability buried in their historical affordability data
.
The same dynamic is visible outside core casino verticals. In the UK prize-draw sector, one report observes that
for smaller operators the picture is more challenging, since compliance costs are proportionately higher, the internal resource harder to justify, and the risk of getting something wrong is just as real
, concluding that
the combination of regulatory evolution, increasing compliance costs and the appetite of well-capitalised buyers creates favourable conditions for continued consolidation, and the gap between well-prepared operators and those who are not is widening
. Across the wider European market, one fiscal-pressure study frames it plainly:
smaller operators tend to report sharper cuts to marketing and innovation budgets when duties and compliance costs rise, sometimes culminating in market exits, while larger groups can absorb higher costs or pursue acquisitions to maintain scale
.
What it means for players and the market
Consolidation driven by compliance cost has an ambiguous effect on player outcomes. Surviving operators generally have deeper compliance budgets, which should translate into more consistent KYC and AML enforcement. But a shrinking pool of licensed operators, combined with rising taxes passed through as worse odds, smaller bonuses or tighter limits, pushes some player value toward unlicensed alternatives. The UK’s own research illustrates the scale of that leakage: a Frontier Economics study for the Betting and Gaming Council found that
£2.7bn is staked each year with unlicensed online operators — around 2.1 per cent of the money wagered with licensed online operators — with a further £1.6bn staked in illegal premises
, and unregulated sites
exempt from taxes and regulatory fees can compete aggressively on price and convenience through larger bonuses, better odds and fewer restrictions
. In the Netherlands, the same tension has already tipped: unlicensed operators now take a majority share of spend, precisely as compliance and tax costs on the licensed side have increased. Reports covering the market for the site’s KYC and AML analysis hub should expect this trade-off — tighter compliance, fewer licensed operators, and a persistent channelisation risk — to define regulatory debate through the AMLR’s 2027 deadline.
Frequently asked questions
Why are small casinos exiting regulated markets rather than just cutting other costs?
Most compliance costs — identity verification systems, transaction monitoring, a Money Laundering Reporting Officer, audit trail infrastructure — are largely fixed regardless of customer volume.
Larger operators can spread these costs across existing engineering and legal functions, while mid-market and smaller operators face the same obligations without that infrastructure
, making the per-customer cost of compliance far higher for small books of business.
Is Curaçao still a low-cost licensing option?
No longer in the way it once was.
The master-license system was abolished on 1 January 2025
, and operators now apply directly to the Curaçao Gaming Authority under a fixed fee structure, with realistic first-year budgets in the tens of thousands of euros rather than the low-cost sub-license arrangements of the previous regime.
Will the EU’s 2027 AML Regulation affect operators licensed outside the EU?
Directly, only EU-facing entities are bound, since
the regulation applies directly in all 27 Member States from 10 July 2027
. Indirectly, any operator serving EU players, regardless of licensing jurisdiction, will need EU-standard controls to retain payment processing relationships and market access.
Does a shrinking number of licensed operators mean safer players?
Not automatically. Surviving licensees tend to have stronger compliance infrastructure, but the Dutch experience shows that rising costs and taxes can also push player spend toward unlicensed sites, where
self-exclusion tools like CRUKS don’t reach them and there is no legal recourse if a dispute arises
.
Methodology
This analysis draws on official regulator publications (UK Gambling Commission industry statistics and enforcement reports, the Dutch Kansspelautoriteit’s annual reports), the text of EU Regulation 2024/1624 and its implementing guidance, and industry-commissioned economic studies such as the Frontier Economics/BGC channelisation research and EY’s affordability-cost estimate. GamblScout.com’s own scoring algorithm, described in our scoring system and weights methodology, separately tracks operator-level licensing status, enforcement history and jurisdictional churn as inputs when assessing operator stability over time.
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