Entain has warned that it may redirect its investments away from the UK to more favourable jurisdictions if the government approves an increase in gambling taxes.
In an interview with The Times, Entain CEO Stella David – head of the operator behind Ladbrokes and Coral – said that including tax increases in the next Budget would have a significant impact on 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.”
It is expected that Chancellor Rachel Reeves will announce higher taxes for the gambling industry in the November Budget. Former Prime Minister Gordon Brown and several other politicians have called for the increase, arguing that the additional revenue should be directed towards combating child poverty.
Brown has backed proposals from the Institute for Public Policy Research (IPPR) suggesting that the tax rate on online and land-based slots should rise to 50% (from the current 21% and 25%, respectively), while the general betting duty should increase from 15% to 25%, excluding horse racing.
However, industry representatives – including the Betting and Gaming Council – have warned that the main beneficiary of such a move would be the illegal market, a concern shared by David.
“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.”
In addition to potential tax hikes, Entain’s UK operations may also be affected by the government’s Pride In Place programme, which includes the use of Cumulative Impact Assessments when licensing gambling establishments. This approach would consider the concentration and influence of betting outlets on 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.”
Entain may face restrictions on expanding its network of UK betting shops, which in turn could make it easier for the company to justify redirecting investments to foreign markets.
Entain is scheduled to publish its third-quarter financial results on 15 October.
Don’t forget to subscribe to our Telegram channel!
