The government’s potential tax raid on gambling companies has sent shares tumbling in the market. There are concerns that the Chancellor, Rachel Reeves, may double taxes on online bookies and casinos in the upcoming Autumn Budget. This has led to a significant drop in shares for companies like Entain, who owns Ladbrokes and Coral, with a 9% slump on the FTSE 100.
Other gambling firms like 888 group Evoke, William Hill, Flutter who owns Paddy Power, and Rank who owns Grovenor Casinos and Mecca Bingo also saw their shares fall on Monday. The Chancellor is reportedly aiming to raise around £3 billion through this tax raid, causing uncertainty and instability in the industry.
The recommendations for this tax raid were proposed by influential think tanks like the Institute for Public Policy Research (IPPR) and the Social Market Foundation. Russ Mould, an investment director at AJ Bell, highlighted that the betting industry may argue that higher taxes could lead to an increase in illegal black-market gambling. This could potentially result in firms passing on extra costs to punters, ultimately causing more harm.
It’s important to note that the speculation suggests certain ‘lower harm’ activities like bingo and the lottery will be unaffected by these tax changes. However, the overall impact on the gambling sector could be significant, with increased regulation and tax pressures adding to the challenges that companies are already facing.
While the Treasury has not provided any official comments on these potential tax changes, the industry is bracing itself for a period of uncertainty and potential financial strain. As the Autumn Budget approaches, stakeholders in the gambling sector will be closely monitoring developments and preparing for any changes that may come their way. The outcome of these tax proposals could have far-reaching implications for the industry and its stakeholders, shaping the future landscape of gambling in the UK.
