Midnite is continuing its pursuit of tier-one status in UK iGaming through the completion of a Series C funding round, despite the headwinds that are on the horizon for operators in the market.
The latest funding round raised $35m for the online casino and sportsbook operator, bringing Midnite’s total equity funding to over $75m, on top of the $100m credit facility secured earlier this year for marketing initiatives and business development.
Proceeds from the latest funding round will contribute towards scaling operations, accelerating product development and international expansion, as Midnite plans to position itself as a tier-one operator with its in-house technology.
Midnite added that most of the funds will be used to expand its human capital to boost its product-led strategy and narrow the separation between itself and the UK’s biggest operators, in addition to growing its product and engineering staff.
The funding round was led by Raine Partners IV, the growth equity fund of global investment and strategic advisory firm The Raine Group. Existing investors Play Ventures, Discerning Capital, Makers Fund and Big Bets also participated in the round.
Nick Wright, Co-Founder of Midnite, commented: “We’re thrilled to have the continued support of some of the best investors in gaming. Our product-centric approach is what has got us to where we are today, and we will continue to place the experience of our players as our highest priority.”
Bucking a UK trend
Midnite’s investment in the UK market is significant, as it goes against trends and actions the industry has seen recently following the announcement of tax increases.
With remote gaming duty rising to 40% from April later this year and a new general betting duty rate of 25% for remote betting being introduced in April 2027, many operators have decided to change their strategy for the UK market.
evoke CEO Per Widerström called the budget “highly damaging for the economy and consumers” as well as “ill-thought-through” and “counterproductive”, saying it would affect UK investment, jobs and player protection. Since then, the operator has initiated a strategic review of its operations.
Super Group has plans in place to mitigate the impact of such tax rises in the UK, with its CFO, Alinda van Wyk, stating: “Going forward, we estimate that these new tax increases will have an impact of approximately 6% to our 2026 Group Adjusted EBITDA.
“However, Super Group already has several mitigation levers in motion, which are intended to offset the tax impact. Our strategy remains unchanged: sustainable growth and disciplined capital allocation. We don’t expect today’s news to alter our long-term trajectory nor our capital return priorities.”
Some operators have shown the same belief as Midnite in the UK market, with Flutter Entertainment stating they are well-positioned to navigate any storm created by the incoming tax hikes. However, they also believe illegal operators will receive a boost as a result.
Meanwhile, Entain estimates an annualised additional cost to its UK&I online business of approximately £200m before any mitigations, but “expects to mitigate approximately 25% of this impact through actions including reducing marketing and promotions”, equating to an EBITDA impact of approximately £100m in 2026 and approximately £150m from 2027.
However, Entain believes it will also benefit from the change, capturing market share left vacant from smaller operators being forced to exit the UK iGaming market.
Yet, it’s clear from this latest funding round that Midnite is ready to capitalise on any market share up for grabs as well.
Wright added: “This capital enables us to hit the gas and accelerate our growth strategy as we pursue tier-one operator status, investing heavily in our product team to truly disrupt the industry with a challenger brand platform for a new generation of players.”
