Entain has warned that it would shift investment out of the UK to more welcoming markets if the government goes ahead with the widely expected increase in gambling taxes.
Speaking to The Times, Stella David, the CEO of the Ladbrokes and Coral operator, claimed that the inclusion of tax rises in next month’s Budget would have significant consequences for the business.
David stated: “At the end of the day, we want to make a profitable global business. There are other markets we have to pivot to as being more worthy of investment. There will be consequences. Having a dislocating increase in tax will have a dislocating impact on the industry.
“Every point of [tax] increase would actually have an impact that certain shops would become unviable … there is no level that does not have some consequence, the scale depends on how far it goes.”
UK gambling future
It has widely been speculated that when Chancellor Rachel Reeves announces November’s Budget, it will include a tax hike on the gambling industry. Former UK Prime Minister Gordon Brown and many others have called for the government to increase gambling taxes to help fund efforts to alleviate child poverty.
Brown has backed the Institute for Public Policy Research’s proposals for a 50% tax on online and retail slots, rising from 21% and 20% respectively, in addition to the general betting duty levied on bookmakers increasing from 15% to 25%, except for horse racing.
However, many in the industry, including the Betting and Gaming Council, have warned that the biggest beneficiary of UK gambling tax increases would be the black market. David agrees.
“I don’t expect anyone on the street to feel sorry for us at all; that’s not their job, but a normal person on the street who likes to have a bet can’t tell the difference between a black market site and a regulated site,” she said.
“Black market operators are there to take as much cash out of the UK as possible, with as little friction as possible. They can look very slick and very professional. The problem is none of the profits they make come back in tax to the UK Government.”
Land-based operations
Beyond a potential gambling tax increase, the future of Entain’s UK land-based operations could also be impacted by the government’s Pride In Place programme.
The programme includes decision-making on “Cumulative Impact Assessments in gambling licensing”, influencing gambling outlets’ location and density in local communities.
The programme states: “This will allow local authorities to take data-driven decisions on premises licences, particularly in areas that have been identified as being vulnerable to gambling-related harm.
“This will empower local authorities to better shape their high streets and neighbourhoods, and to ensure a healthy mix of premises in their town and city centres.”
As a result, Entain is likely to have limited options when it comes to expanding its vast network of UK betting shops, which may make it simpler for the company to justify moving investment to overseas markets.
Entain is set to publish its third quarter financial results next week on 15 October.
