Flutter Entertainment has moved Sky Bet’s headquarters to Malta amid concerns about the possible consequences of tax changes in the UK.
According to ITV News, Sky Bet employees in seven cities, including three in the UK, were informed earlier this year that the company was relocating its headquarters to Malta.
The company confirmed to SBC News that the relocation was initiated in June this year. The reason was the prolonged debate around taxation and the complexities of the Gambling Act review, which began in December 2020 and concluded in 2023. However, Flutter added that although a number of “commercial and marketing positions” were transferred to Malta during the summer, the company remains a major employer in the UK, maintaining centres in London, Leeds and Sunderland.
Reasons for Relocating Sky Bet’s Headquarters to Malta
Sky Bet – the bookmaker brand of Sky Betting and Gaming, which also includes Sky Vegas, Sky Casino, Sky Poker and Sky Bingo – has been based in Leeds since 2010. Despite some redundancies at the Leeds office, the company remains a significant tech employer in the city.
Flutter’s statement explained: “Flutter paid more than £700m in taxes to HMRC last year and we employ over 5,000 people across the UK including almost 2,000 in Leeds and 600 in Sunderland.
“As with most global businesses around the world, we are constantly striving to remain competitive and efficient and to give ourselves the best chance of success in an incredibly challenging environment.”
Initially, the ITV News report focused on taxation issues. However, the challenges that Sky Bet and other British operators face have persisted for at least four years. The Gambling Act review, which lasted two and a half years, created significant uncertainty.
As one of the UK’s largest online bookmakers, Sky Bet must still comply with the measures of the Gambling Act Review White Paper, including the ban on cross-selling bonuses and the sponsorship Code of Conduct.
Nevertheless, the company clearly views the UK as a difficult environment for hosting its senior operations amid continuous regulatory changes. For example, the provisions of the 2023 White Paper are still being implemented and adjusted, while heated and often speculative debates around taxation continue.
Sky Bet also points to increasing competition from illegal bookmakers that do not hold a licence from the UK Gambling Commission (UKGC). The presence of such firms is often cited as an example of the negative effects of excessive taxation and regulation. However, lawmakers appear to have grown tired of these arguments.
“The challenge we face is only made harder by the recent Gambling Act Review, the significant rise of illegal, unregulated black-market competitors and the possibility of tax rises in the Budget,” Flutter’s statement continued.
“In June this year, after migrating Sky Bet onto the same technology platform as our other brands, we decided to move a number of commercial and marketing roles to our commercial centre in Malta – where Flutter already employs over 750 people.”
Rachel Reeves, Chancellor of the Exchequer in the Labour government, will present the draft Budget on 26 November – unusually late, almost on the eve of Christmas. Typically, the Budget is released in October or early November.
A rise in gambling taxes is widely expected. Some, such as former Prime Minister and Chancellor Gordon Brown, argue that it could be used to remove the two-child limit on child benefit allowances, helping reduce child poverty in the UK.
Initially, the Treasury began consultations on a possible merger or harmonisation of three types of gaming taxes: 21% Remote Gaming Duty (RGD) on online gambling, 15% General Betting Duty (GBD) on all types of bets, and 15% Pool Betting Duty (PBD) on horse and greyhound racing – into a single 21% tax.
However, after heavy lobbying from bookmakers and the horse racing industry – the latter even going on strike in September – reports emerged that the Treasury intends to exempt racing from any tax increases.
This would shift the heavier tax burden onto online gaming and slots, which are taxed under Machine Gaming Duty (MGD). Another scenario, which is far more concerning for bookmakers, involves raising MGD from 20% to 50% and RGD from 21% to 40%.
In any case, operators will face higher costs – and will look for ways to reduce them, whether through cuts in marketing, staffing, or relocating to other jurisdictions. According to Tax Policy Associates, Sky Bet will reduce its tax liability by about £55m by moving to Malta, where the tax rate is 5%.
Implications of Tax Changes for the Industry and Potential Company Exodus
Flutter’s statement concluded: “This decision was made for a number of strategic and commercial reasons and will have some tax implications. But Flutter is committed to the UK and Sky Bet will continue to pay UK corporation tax on its profits.”
The relocation of Sky Bet to Malta demonstrates that the island continues to hold a strong position as a European iGaming hub, despite new challenges and international disputes over its protectionist “Bill 55”.
Betting and gambling account for about one-tenth of Malta’s economy, and the government welcomes the arrival of new companies. Conversely, Sky Bet’s new status as an overseas operator may signal a warning to the UK and its overseas territory Gibraltar.
Gibraltar’s authorities are concerned that tax increases could affect both its own economy and that of the UK. British politicians also note that many UK-based iGaming companies choose to register in Gibraltar due to its low tax rate.
“Gibraltar is part of the British family and any UK tax rise is amplified in Gibraltar because UK regulated gambling is a key pillar of the economy,” wrote Andrew Lyman, Gambling Commissioner with the Gibraltar government, on LinkedIn earlier this month.
“Gibraltar-based, UK-facing firms pay £750m to the UK exchequer in gambling taxes (on a point of consumption basis). UK-facing, Gibraltar-based operators are dual regulated.”
An exodus of companies from the UK and Gibraltar remains speculative at this stage. However, Malta is watching closely. The same can be said of Estonia, which is seeking to become another iGaming hub, introducing a 4% tax rate and drafting relevant legislation.
A mass departure of companies from the UK – Europe’s largest gaming market – in search of a new home could give Estonia the boost it needs, if it manages to attract them away from Malta.
Don’t forget to subscribe to our Telegram channel!
