Bookmakers take hit over fears of tax increase

Shares in London-listed bookmakers fell sharply on news that the Treasury is considering a £3 billion tax increase for the gambling sector to shore up public finances.
Collectively around £1.8 billion was wiped off the value of Entain, Evoke and Flutter’s UK shares after a report in The Guardian that changes to the UK’s betting and gaming duties could be on the way, to raise between £900 million and £3 billion.
Shares in Entain, the gambling group behind Ladbrokes and Coral, fell 103p, or 13.4 per cent, to 664p in early morning trading on Monday before paring some losses to edge back above 700p. Evoke, formerly 888 Holdings, was down by 7¼p, or 11.2 per cent, to 57¾p and Flutter’s shares in London fell £13.90, or 7.5 per cent, to £171.50.
Flutter owns gaming brands such as Paddy Power, PokerStars and FanDuel, the leading American sports betting operator.
Proposals to increase taxes on gaming companies have been put forward by two influential think tanks, the Institute for Public Policy Research (IPPR) and the Social Market Foundation (SMF).
They are also backed by Derek Webb, a former poker player and casino game inventor, who has funded campaigns for stricter regulation of the gambling industry and has given £1.3 million to Labour since the start of 2023.
The IPPR report, published in September, suggested that the government could raise £2.9 billion next year and up to £3.4 billion by 2030 by doubling taxes on “higher harm” products such as online casino games. Duties on “lower harm” products, such as lottery and bingo, would remain unchanged.
Under the IPPR’s plan other duties, including those that affect high-street bookmakers’ profits and online operators, would also be increased.
According to The Guardian, the SMF, which is partly funded by Webb, is working on a proposal to double the tax on online gambling companies from 21 per cent to 42 per cent, raising about £900 million.
The think tank is also expected to highlight other jurisdictions, such as several states in the US, where online gambling taxes are far higher than in the UK.
The UK levies seven different types of betting and gaming duty, with the exact rate varying depending on the type of specific activity. Last year the taxes raised £3.3 billion, or about £2.2 billion if the national lottery is excluded.