How will the UK gambling sector be hit by the Budget?
There are concerns for the UK gambling sector in the lead-up to the Autumn Budget. What could be on the cards?


The UK gambling sector has become the latest victim of “pre-Budget anxiety”, says Tom Saunders in The Times. The news of a potential £3 billion tax raid on the sector has wiped billions off the value of its biggest players. Entain, which owns Ladbrokes and Coral, and Evoke, which runs William Hill, both saw their stock drop 16% on Monday. Flutter Entertainment, which owns Paddy Power and Betfair, and Mecca Bingo-parent Rank Group retreated by 8%. More than £3.5 billion was erased from the sector’s collective market value.
The Treasury is looking at two separate proposals, one from the Social Market Foundation (SMF) to increase online gaming taxes by £900 million, and another from the Institute for Public Policy Research (IPPR), which would increase a range of duties by £3 billion, says Rob Davies in The Guardian. The SMF advocates doubling the tax on online gambling companies from 21% to 42%, while the IPPR thinks the Chancellor should double taxes, such as the 15% general betting duty levied on high-street bookmakers’ profits. Analysts think that while the government is unlikely to opt for the higher range of duty, the sector is “facing tougher regulation and taxes”.
UK gambling sector: how are markets reacting?
The market’s reaction to the plans looks “overdone”, says Cristina Gallardo on Morningstar. The most likely outcome is an increase in remote gaming duty of between 3% and 5%. Given that UK tax rates on gambling companies are still “comparatively low”, such a hike “shouldn’t prove to be an existential crisis for the sector”. While small-scale bookmakers might “struggle” to absorb the costs, larger firms will simply “cut marketing and promotion costs, reduce sports sponsorship and offer less favourable odds to customers”.
MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
It may be harder than you think for firms to pass on costs to consumers through poorer odds, since this is a “competitive and largely undifferentiated industry”, says Lex in the Financial Times.
So, while the “knee-jerk” share price moves may be an “overreaction”, they reflect justified fears about “an unpopular sector still on the watch list of regulators and governments”. The “contentious” nature of gambling makes it a soft target, especially since the “lightly staffed” nature of the online sector means a reduced risk of job cuts. Both Sweden and the Netherlands recently raised taxes on the sector.
The fact that the UK gambling industry is in the “firing line” is particularly “problematic” for those companies still highly dependent on British gamblers, says Yawen Chen on Breakingviews. For example, Evoke gets about 70% of group earnings before interest, tax, depreciation and amortisation (Ebitda) from the UK, while Entain and Flutter still derive most of their money from Britain.
Entain shareholders are now probably feeling “pretty downcast” about management’s 2021 decision to reject an approach from US group MGM Resorts, with whom it has a US joint venture. With larger firms keen to sell UK assets and smaller ones wanting to “couple up”, gambling bankers will be watching the Budget closely.
This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.
Get the latest financial news, insights and expert analysis from our award-winning MoneyWeek team, to help you understand what really matters when it comes to your finances.

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.
He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.
Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.
As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.
Follow Matthew on Twitter: @DrMatthewPartri
-
Is it time to ride the recovery in emerging markets?
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
Could the Enterprise Investment Scheme cut your tax bill?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
'Ride the recovery in emerging markets': Gustavo Medeiros of Ashmore Group tells MoneyWeek
Interview What's the outlook for emerging markets? Gustavo Medeiros, head of research at Ashmore Group, gives his analysis and reviews progress in developing economies
-
What is the Enterprise Investment Scheme and should you have one?
The Enterprise Investment Scheme is tax-efficient and potentially lucrative. Taking a chance on the scheme could trim your family’s IHT bill, says David Prosser
-
The alcohol industry is suffering as consumers sober up – is it still worth investing in the sector?
Changing consumer tastes are rocking the alcohol industry, but the best players are adapting their strategies. Buy them while their shares are still cheap
-
A strange calm in credit
Corporate bond markets remain remarkably relaxed, with yields that offer little compensation for risks
-
The City's big bet on green finance fails to pay out
Opinion Insurers and banks are backing away from “green finance”, and there is not much sign of the green boom we were promised. That’s a problem for the City
-
Why is English football thriving – and can it last?
What has gone so right for English football? The national team has found its feet; the Premier League is swimming in money and profits are soaring
-
Six top investment trusts for smaller stocks
Liquidity constraints mean investment trusts are best placed to seize the juiciest opportunities
-
Could colour diamonds add a sparkle to your portfolio?
Diamonds of various shades never go out of fashion, says Chris Carter