Stable companies develop their strength in times of instability. Whatever the cause of market instability, well-equipped companies find ways to adapt. This is particularly relevant at the moment given recent changes to UK tax policy.
The latest example of Chancellor Rachel Reeves’ budget planning coming through is the move to Remote Gaming Duty (RGD). The levy imposed on gambling operators in the UK increased from 21% to 40% on April 1, 2026. According to the government, the increase is intended to reflect the growth of online casino gambling.
Reeves’ assessment is actually correct. Gambling operators diversified their portfolios over two decades ago to adapt to changing tastes. Paddy Power, for example, was created in 1988 through the merger of three Irish bookmakers.
From a network of betting shops in Ireland, Paddy Power now has a global network of online and offline assets. The casino at Paddy Power alone offers players access to over 2,000 games, including exclusive games like Paddy’s Mansion Heist. This asset includes a sports betting, poker and bingo site as well as live betting offices.
Nothing changes if you stay the same
Diversification was the strategy then, and that will continue to be the case in the future as gambling operators respond to the rise in RGD to 40%. Gambling operators aren’t the only ones facing tax increases. The beleaguered hospitality sector is now grappling with higher business rates and an increase in the minimum wage.
Speaking to The Guardian, Nick Evans, co-owner of the Old Crown Coaching Inn in Faringdon, Oxfordshire, said he could not increase prices any further. The former city trader is almost ready to admit defeat when it comes to the food and beverage side of his business.
“The only way to make it work is to have a microwave and staff who can open a package and put it on a plate. That’s not why we got into this industry,” Evans told The Guardian.
To keep his business afloat, Evans is doing what many old pubs do: adding more hotel rooms. Adding six more rooms to the existing 14 would “allow us to grow,” Evans explained. In this case, diversification is more of a necessity than a luxury. As an entrepreneur, it is important to conclude that steadfastness is not necessarily the answer.
Cutting costs is not always the solution
A recent report from the British Chambers of Commerce shows that 55% of British businesses are increasing their prices due to tax increases. Another 26% have cut their investment plans. In addition to these steps, developing new sources of income is crucial. Gaming and hospitality are not the only industries currently facing economic changes.
The long-term effects of U.S. President Donald Trump’s war on Iran are already affecting trucking companies and farmers due to increased oil prices. These costs will cut across dozens of industries, meaning very few will escape them.
Cost cutting is a valid strategy, but so is diversification. The way forward could be to find ways to add new services through online channels. Through diversification, a new range of products could be considered. Whatever the pivot, it must address the central problem of increasing costs by either increasing sales or offering something at a lower price. The best companies succeed in this, which is why they remain stable even in unstable times.
