Bally’s Intralot reaffirmed its 2026 adjusted EBITDA guidance of approximately €422 million on 1 April, the day the UK remote gaming duty rose from 21% to 40% of gross gaming revenue, as the company reported Q1 UK net gaming revenue of £147.9 million and signalled an active appetite for acquisitions in a market under severe margin pressure.
Q1 Performance: Flat on a Seasonal Peak
UK B2C net gaming revenue for Q1 2026 came in at approximately £147.9 million, essentially flat against Q4 2025’s £148.8 million. CEO Robeson Reeves framed that as stronger than it looks. Q4 carries the autumn sporting calendar, Christmas build and peak promotional intensity across the market. Holding that level into a quieter January-to-March period, he said, represents exceptional underlying performance.
Year-on-year, UK B2C NGR was up approximately 10.5%, with every month of Q1 delivering growth. Active players were flat quarter-on-quarter but up 8.7% year-on-year. First-time depositors rose 10.8% quarter-on-quarter and 59.4% year-on-year.
The customer pipeline is expanding into the tax change, not contracting. — Robeson Reeves, CEO
The Mitigation Bridge
Reeves walked through the arithmetic from the company’s 2025 pro forma adjusted EBITDA of €430.8 million. The direct cost of the duty increase on UK gross gaming revenue is approximately €95 million. Against that, the company has four active mitigation levers: generosity reductions and marketing optimisation adding €25 million, already phased in during Q1; headcount and operating expenditure savings adding €10 million, actioned in Q1; transaction synergies from the Bally’s-Intralot combination adding €15 million; and organic growth across all markets, including the Lottery division which carries no UK gaming duty exposure, adding €34 million.
The net outcome is approximately €422 million, a 2% reduction on the 2025 pro forma base.
The margin argument Reeves returned to repeatedly is the one he considers decisive. Bally’s Intralot’s B2C adjusted EBITDA margin was approximately 40% in Q4 2025. Most comparable UK operators run below 25%. A duty increase applied to gross gaming revenue, not profit, compresses a 20-to-25% margin towards zero. At 40%, the arithmetic is different.
M&A: Motivated Sellers and Margin Headroom
The company’s stated M&A appetite runs through the earnings call from start to finish. Reeves described the UK tax environment as creating “very motivated sellers” and said the company has the platform, margin headroom and management team to act on the right opportunities.
On what kind of targets the company would pursue, COO Chrysostomos Sfatos confirmed the appetite is for acquisitions that deliver either substantial synergies or meaningful cost reductions on the target, subject to the group’s financial policy goals: the path to 2.5x net leverage and continued shareholder distributions. Net leverage stood at 3.46x at year-end.
We will do whatever M&A is necessary by adding EBITDA by considering anything that’s meaningful in terms of very, very substantial synergies that we feel comfortable we can deliver or cost reductions on the target. — Chrysostomos Sfatos, Group COO
Sfatos noted that reaching the 2.5x target would slip by roughly one year due to the tax change, as the company expects to capture share from operators exiting or shrinking in a post-duty market. He indicated the gross debt reduction plan, which includes a €130 million retail bond maturing in February 2029 and a Greek bank loan, remains on track through amortisation and cash generation.
On a specific question about whether the company would acquire a sports betting business or build one in-house, Reeves was direct: sports betting currently runs at approximately £1 million per month in UK revenue, functions as an acquisition funnel for iGaming players rather than a primary revenue driver, and any inorganic move would only be pursued if it could be absorbed into the company’s margin structure. The group currently uses Kambi for sports betting infrastructure.
New Market Expansion Still on Track
Reeves confirmed the company remains on track to launch in two new B2C markets during 2026, utilising the Intralot footprint and existing regulatory relationships. He acknowledged that any inorganic opportunity of sufficient scale could alter or accelerate that plan, but the organic expansion programme has not changed.
The Lottery division’s zero UK gaming duty exposure was highlighted repeatedly as a structural buffer. Reeves described non-core international markets as stable, with modest FX translation headwinds in certain markets but no material deterioration from the position reported at the FY 2025 results.
Capital Returns and Deleveraging
The board is recommending a €30 million dividend to the Annual General Meeting, drawn from previously undistributed profits. Approximately €20 million of share buybacks have been executed since the EGM authorisation, using total return swap products with international banks. Reeves described the share price as representing outstanding value and indicated the buyback programme will continue at timing the company determines appropriate.
Total capital returns of €50 million represent less than 30% of the €172.7 million levered free cash flow reported for FY 2025. CapEx for 2026 will be modestly above the approximately €60 million recorded in 2025, driven by certain US renewals and a pending outcome on the Victoria Monitoring Licence bid in Australia.
The company’s full year 2025 results, published 17 March 2026, reported pro forma revenue of €1.0858 billion, adjusted EBITDA of €430.8 million and a margin of 39.7%. The Bally’s-Intralot €2.7 billion acquisition completed in 2025 and Intralot’s €660 million financing package underpins the combined capital structure now absorbing the UK duty change.
The UK market shift from 21% to 40% remote gaming duty has already prompted significant operator responses. The iGaming EU has covered the estimated impacts on Flutter and Entain, as well as Evoke’s warning of job losses and black market risk. Reeves’ read on the market is consolidation into higher-margin operators, with smaller players handing over customer databases rather than continuing to operate at compressed or negative margins.
Source: Seeking Alpha / Bally’s Intralot Q4 2025 Earnings Call Transcript
