Inspired Entertainment said UK interactive gross gaming revenue rose 40% year on year in the second quarter, even after the UK raised remote gaming duty to 40% from 21% on 1 April. The company said it was “doubling down” on the UK online gaming market, and Brooks Pierce said market share in the country had climbed from 3% to more than 11% over the last few years.
The higher rate applies to profits from remote gaming with UK customers, regardless of where the operator is based. Under the government’s notice, remote gaming duty has applied on a place-of-consumption basis since December 2014.
In its second-quarter results for the period ended 30 June, Inspired reported revenue of $60.8 million, down 24% from a year earlier, and adjusted EBITDA of $27.1 million, down 5%. The company said the comparison was distorted by the sale of its UK holiday parks business and the restructuring of its pubs business, both of which had contributed to the prior-year period. Excluding those portfolio moves, it said revenue grew like for like.
The interactive division was the strongest part of the business, with revenue up 15% to $15.7 million and adjusted EBITDA up 13% to $10.3 million. Inspired also said sequential quarterly growth was 6% in revenue and 14% in adjusted EBITDA, and it reported a record 45% adjusted EBITDA margin, excluding periods with a UK VAT rebate.
Management said the full effect of the new duty rate was already reflected in the second quarter and expected that period to mark the low point for interactive performance this year. Lorne Weil, the executive chairman, said the tax increase masked what would otherwise have been substantially stronger growth, while Pierce said the division has historically improved in the second half and that the fourth quarter is often helped by seasonal game launches.
Inspired kept its full-year 2026 adjusted EBITDA target at $112 million to $118 million and lifted its free cash flow conversion outlook to 20% or above. Year to date, it said it had repaid more than $23 million of debt, including $10 million in the second quarter, and had repurchased more than 700,000 shares.
The company is also increasing content output. Inspired said its first title from the new Manchester-based Bee Reel Games studio is expected by the end of the year, with the studio eventually adding about one game a month to the pipeline.
