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Gloom and silver linings
With a “deeply appalled” here and a “devastating hammer blow” there, UK gambling firms and trade bodies have in the main reacted to Chancellor Rachel Reeves’ Wednesday tax hikes with dark dismay.
gorge on market share left by smaller brands
Amid the gloom, however, another scenario is emerging according to analysts from major banks, in which the major brands such as FanDuel parent Flutter and Entain gorge on market share left by smaller brands who lack the scale to survive the tax rises.
Taxes rose for online casino firms from 21% to 40%, and from 15% to 25% for online sports betting, and will come into effect from April 2026.
Cautious optimism
Lesser known brands are already bleeding. According to The Guardian, online sportsbook Macbet Sports is no longer taking soccer bets (15% to 25% hike), while BetGoodwin said it had to cut its horseracing sponsorship.
Analysts at Frankfurt-based Deutsche Bank, the Swiss banking group USB, and New York contemporaries Jefferies have all, however, seen the tax hikes as reason to buy stock in Entain (UBS), and “every listed player in the sector” (Jefferies).
a clearing event which improves the near-term outlook of the UK gambling sector.`”
Deutsche Bank declared the Treasury’s budget “a clearing event which improves the near-term outlook of the UK gambling sector.`”
The analysis was backed up by the market, with shares in Entain and Flutter reportedly both up around 4% after the tax hikes were announced.
The financial analysts’ reason for optimism was twinfold. Namely, that the protracted uncertainty over taxes was over, and that the likes of Entain and Flutter will “mop up market share from smaller rivals that cannot cope.”
Those in peril
One of those smaller rivals is Mecca Bingo owner Rank Group, which initially saw its shares spike after the new budget abolished the 10% tax on bingo takings. Rank, however, has plenty of skin in the online casino game, leading it to advise of an operating profit hit of £40m ($52.8m), news that saw its stock subsequently plummet over 9%.
According to reports, the Evoke rebranded 888 Holdings, whose troubles never stopped since buying William Hill for £2.2bn ($2.5m) in 2021, is also struggling to survive. Evoke’s stock fell almost 23% since the new budget.
Flutter’s line meanwhile is that while the taxes were “very disappointing,” its scale and UK market-leading position meant the firm was “well placed to navigate” the post-tax hike apocalypse.
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