Waterhouse VC, centered on gambling technology investments, has focused on being a "infrastructure provider" in the global gambling ecosystem for six years. Despite traditional venture capital's lack of attention to this field, it has steadily grown through industry resources and professional judgment. In 2025, the fund achieved a total return of 12.6% despite a currency headwind of 7.7%, while the UK introduced an aggressive gambling tax policy, raising concerns about market prospects in the industry. On one hand, investment institutions are actively deploying in the gambling tech sector, and on the other, regulatory policies are causing industry turmoil, together sketching a complex situation for the global gambling industry. Relevant gambling investment cases and policy compliance standards can be referenced on the PASA official website.
Fund Performance 2025: Earning Against the Wind, Transaction and Portfolio Highlights
Waterhouse VC showed significant effectiveness in investment pacing and portfolio management in 2025:
Core Performance and Transaction Dynamics
Impressive returns: Before deducting all fees and expenses, the fund's total return reached 12.6%, affected by the appreciation of the Australian dollar against the US dollar, the value of US assets decreased after conversion;
Rigorous transaction screening: Over 450 companies assessed throughout the year, 66 entered due diligence, and 6 new option transactions were finalized, with 11 ongoing option transactions maturing in early 2026;
Clear earnings structure: Returns mainly came from the stock portfolio, with moderate contributions from company dividends, no option transactions exercised.
Outstanding Company Portfolio Performance
Voxbet expands social gambling: Launched the "Pass The Bet" feature, allowing users to collaborate and share multi-event bets (parlay) via links without manually building betting schemes, meeting social gambling needs, and this feature is "plug and play," requiring no operator infrastructure overhaul, validated by giants like FanDuel;
Live dealer casino business exploded: A portfolio company focused on the live dealer casino track, rapidly expanding across multiple platforms and jurisdictions, achieving a return rate of 19 times the initial investment, with continuous growth in dividend income.
Investment Focus: Market Forecasting + AI Leading the Layout
In 2025, the fund focused on two core themes, continuing into 2026:
Mainstreaming of prediction markets: Upgrading from niche gambling products to recognized financial instruments, hedge funds begin hiring dedicated prediction market traders, expected to become a mainstream asset class; young users anticipate "betting on everything," breaking betting scenarios out of sports, extending to culture, news, and everyday scenes, the fund continues to connect with relevant startups;
AI as an industry essential: AI has become a "must-have" in the gambling operator's tech stack, with a surge in AI-first companies in 2025, but the fund insists on investing in "solving high-cost problems, generating measurable business value," especially favoring personalized and social gamification technologies that enhance user experience intuitiveness and attractiveness.
UK Tax Controversy: Aggressive Policy May Lead to Industry "Lose-Lose"
The UK's gambling tax policy introduced in the autumn budget of 2025 contrasts sharply with the fund's proactive stance:
Core Tax Reform and Industry Impact
Tax rates soared: Remote gambling tax from 21% to 40% (effective April 2026), remote sports gambling tax from 15% to 25% (effective 2027), far exceeding the "sustainable tax rate threshold" of 25%;
Pressure on businesses and employment: Operators like Flutter, Entain warn, annual profits could decrease by 300-500 million GBP, expected to lead to a loss of 15,000 - 17,000 jobs, small operators may exit directly, facing shrinkage in the UK's 11.5 billion GBP gambling market;
Tax revenue expectations fall short: PwC research shows that tax rates over 25% will slow market growth, increase the black market, players may turn to unregulated illegal platforms, and actual government revenue may only reach half of expectations.
Player and Market Chain Reactions
Player interests harmed: Operators, to maintain profitability, might lower the return to player (RTP) from 95%-96%, while increasing marketing efforts to compensate for profit gaps, potentially exacerbating addiction risks;
Lessons from other countries: Cases like Pennsylvania's 54% online slot tax, Delaware's 57% video lottery tax, all led to rampant black markets, operator migration, ultimately less tax revenue than expected, and affected consumer protection.
Future Layout: Focusing on Ecosystem Synergy, Keeping an Eye on Regulation and Grey Markets
Waterhouse VC and the global gambling industry both face new opportunities and challenges:
Fund strategy adjustment: Approaching soft close targets, shifting from exploring external opportunities to integrating internal ecosystem resources, intervening early in company establishment, building exclusive project channels, focusing on advancing high-leverage opportunities for companies like Racing and Sports (RAS);
Regulation and market opportunities: Focusing on New Zealand's online gambling and casino licensing regulatory reforms, believing infrastructure providers can help operators comply and enter new markets;
Addressing grey market pain points: Approximately 3.9 billion AUD flows annually to unlicensed overseas platforms in Australia, expected to increase to 5 billion AUD by 2029, the fund focuses on integrity technology solutions to recover lost market liquidity.
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This article is from "PASA-Global iGaming Leaders," a gambling industry news channel:https://t.me/pasa_news
Original in-depth gambling channel:https://t.me/gamblingdeep
Free data reports: @pasa_research
PASA Matrix: @pasa002_bot
PASA official website: https://www.pasa.news
