Remote Gaming Duty Hike Sparks Sell-Off in UK Gambling Sector

Flutter Entertainment, Entain, Rank Group, and Evoke are among the companies that have been impacted and are scheduled to report their quarterly earnings this week. The rush to sell has transpired after Chancellor of the Exchequer, Rachel Reeves has not ruled out industry tax hikes in her Autumn budget. 2024’s budget left the industry unscathed. The proposal has won the support of former Prime Minister Gordon Brown, who suggested the funds raised by the hike could help to fix child poverty.

Prior to the tax hike announcement, Entain had enjoyed a hike in share value, with shares in the gambling behemoth being bought for £10 a piece. Now, figures now show their value has dropped by 5%, and the parent company of highstreet brands Ladbrokes and Coral’s individual shares have dropped from 995p to 942p.

Flutter has also been impacted. Its UK stock value has fallen by 5.5%, and across the Atlantic, it has faced an even larger blow, falling by 8% throwing its market cap below $50bn. In the second financial quarter, the FanDuel and Paddy Power parent reported a 16% rise of $4.2bn although revenue growth performance slumped in US sports betting. The international story has also been one of flattening out, which has seen Flutter’s stock start to fall. Following the trend of falling stocks, another company to face a similar fate is William Hill and 888’s parent company, Evoke, which saw a 7% stock decline to 67p per share.

The move for this new tax bill passing in parliament has sparked debate over its historical irony. The former Prime Minister Gordon Brown, now advocating for this duty hike was the very individual responsible for changes to the gambling industry’s taxation in 2001. Those changes saw thousands of jobs being created, and an increase in treasury capital.

Louie French, Shadow Gambling Minister wrote on X: “The UK’s regulated gambling industry supports over 100,000 jobs, contributes billions to the economy each year and is a major sponsor of our much-loved sports. Labour’s short-sighted tax raid will only fuel the black market, hurting jobs, British sports and punters.”