Flutter Entertainment plc acknowledges the UK Government's changes to gaming taxation in the autumn budget.
The tax adjustments include significant increases in online iGaming and sports betting taxes starting from April 2026 and April 2027 respectively.
Flutter anticipates a substantial impact on its EBITDA, with mitigation strategies in place for the near future.
Tax Increases Details
Online iGaming tax to rise by 19 percentage points to 40% in April 2026, while sports betting tax (ex-horseracing) to increase by 10 percentage points to 25% in April 2027.
Financial Impact
Expected EBITDA impact for Flutter is approximately $320 million in fiscal 2026 and $540 million in fiscal 2027 before any mitigation efforts.
First Order Mitigation Strategy
Flutter plans to reduce operational, promotional, and marketing spend to mitigate the impact, expecting around 20% of gross impact in the first six months post-implementation.
Second Order Mitigation
As the largest operator, Flutter aims for market share gains and operational efficiencies to counterbalance the tax increases over the medium-term.
- The tax increases pose a significant challenge to the industry as a whole, with potential adverse effects on legal operators.
- Flutter believes its scale and position in the UK market, coupled with cost-saving measures, will help navigate through the changes effectively.
Flutter Entertainment plc faces a notable financial impact due to the tax adjustments, but strategic mitigation plans and market advantages position it well for the future.