London, UK – Shares in UK gambling companies tumbled this week after Chancellor Rachel Reeves unveiled sweeping tax increases on online gaming, sparking warnings of job losses and a surge in black-market activity.
Tax Changes
- Online Casino Gaming: Tax rate raised to 40%, nearly double the current 21%
- Online Sports Betting: Increased to 25% from 15%
- Unaffected Segments: Spread betting, pool bets, horse racing, and retail sports betting remain unchanged
The Treasury expects the measures to generate an additional £1.1 billion (US$1.5 billion) annually by 2029–30. Reeves defended the hikes, arguing that online slots and remote gaming “can quickly drain the bank balances of vulnerable people after just a few clicks.”
Market Impact
- Evoke: Parent of 888 and William Hill saw shares plunge 18% Wednesday, followed by another 10% Thursday before a modest rebound. CEO Per Widerstrom blasted the budget as “ill-thought-through, counter-productive, and highly damaging,” warning of reduced UK investment and “the likely need for thousands of jobs to be cut.”
- Flutter Entertainment: Owner of FanDuel, Paddy Power, Betfair, and PokerStars expects the changes to cost £650 million (US$860 million) over two years. UK & Ireland CEO Kevin Harrington cautioned that higher taxes could strengthen illegal operators who “don’t pay tax and don’t invest in safer gambling.”
Analyst Perspective
Despite the sell-off, analysts see potential upside. Many argue the new regime could accelerate consolidation, with larger operators absorbing smaller rivals and expanding market share.
- Deutsche Bank: Called the budget “a clearing event which improves the near-term outlook of the UK gambling sector.”
- UBS & Jefferies: Both advised buying UK gambling stocks, betting that industry heavyweights will emerge stronger.
