A drop in the value of London-listed bookmakers such as Flutter, the parent company of Paddy Power, was observed following reports suggesting that the UK’s Labour government may implement a tax increase on the gambling industry totaling £3 billion to bolster public finances. This news was circulated amidst expectations that UK’s Chancellor, Rachel Reeves, will be announcing increments in certain taxes in her inaugural budget on the 30th of October. According to The Guardian, tax increases on betting companies could be part of this announcement.
Stocks of organizations such as Entain (Ladbrokes’ parent company), Evoke, which oversees the 888 brands, and Flutter all experienced significant drops in value in early trading. Flutter, Evoke, and Entain have not yet responded to requests for comments from Reuters.
Analysts from Berenberg highlighted that Evoke would be hardest hit due to the company’s current financial standing. They suggested the proposed higher taxes would affect both the size and condition of its business. Entain was also predicted to feel significant effects, with a tightening financial position further complicated by its high leverage, while Flutter was seen as less vulnerable due to its diverse portfolio.
Entain recorded the highest percentage drop on the FTSE 100 index, while Evoke’s shares were the lowest on the UK’s all-shares index, as reported by Reuters.