What Are The Implications of Strong UK Trading in Q2?

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What Are The Implications of Strong UK Trading in Q2?

Idea

June 16, 2026 04:00 AM GMT

Morgan Stanley & Co. International plc+MGambling | Europe Ed Young

Equity Analyst

What Are The Implications of Ed.Young@morganstanley.comJamie Rollo +44 20 7677-1761

Jamie.Rollo@morganstanley.com +44 20 7425-3281

Strong UK Trading in Q2? Luke Holbrook

Luke.Holbrook@morganstanley.com +44 20 7425-1882

Our channel checks suggest strong broad-based trading in the

Leisure and Hotels

UK in Q2, an acceleration from Q1 levels, despite (or because of) Europe

higher online casino taxation from April. We think this is Industry View Attractive

unexpected and briefly discuss 3 plausible drivers and takeaways

for our coverage.

We now have broad-based commentary from UK-facing operators and suppliers

that Q2 trading in the UK will be strong. On its recent Evoke acquisition call,

Bally's Intralot commented that its UK online business delivered +10.5% constant

currency growth in Q1, improving to 11.5% in April and double digit in May,

accelerating from April. Our more recent conversations with private operators

suggest a similarly robust (and improving) profile throughout Q2, with a private

supplier describing May as an all-time record revenue month. This appears counter-

intuitive compared to the current market view that higher gaming taxation will force

fringe operators to curtail spending, lowering industry growth but leading to share

gains for tier 1 operators.

A continuation of trends... The UK industry entered Q2 with good momentum. Per

UK Gambling Commission (UKGC) data, the UK market grew 7% in Q1, despite weak

sports betting trends (wagers -8%, GGY +1%), driven by online casino, with slots

GGY +12%. The UKGC sample is derived from the largest operators representing