Flutter warns UK tax hikes will reduce earnings by hundreds of millions

• UK government raises remote gaming tax to 40% from April 2026 and sports betting tax to 25% from 2027.
• Flutter expects £320m ($320m) earnings hit in 2026, rising to £540m ($540m) in 2027 before cost mitigation.
• Flutter plans to offset 40% of tax impact through cost savings and operational efficiencies by 2027.

Flutter Entertainment, a global leader in online sports betting and iGaming, has warned that increased UK gambling taxes announced in the Autumn 2025 budget will reduce its adjusted earnings by hundreds of millions over the next two years.

The UK government plans to increase the remote online gaming duty from 21% to 40% starting April 2026, and raise the sports betting (excluding horse racing) tax from 15% to 25% beginning April 2027.

‘Black market operators don’t pay tax’

Commenting on the situation, Kevin Harrington, Flutter’s UK and Ireland CEO, stated:

“Today’s tax increases are a very disappointing outcome and will have a significant adverse impact on our industry. The Chancellor rightly wants to address harm, but these changes will hand a big win to illegal, unlicensed gambling operators who will become more competitive overnight. These black market operators don’t pay tax and don’t invest in safer gambling.”

He highlighted that the UK’s remote gaming duty at 40% exceeds rates in other countries like the Netherlands, where similar tax hikes led to increased illegal gambling and lower government receipts.

Nevertheless, Harrington expressed confidence in Flutter’s ability to navigate the changes through scale and proactive cost management initiatives.

UK tax increases and financial impact

The recently announced UK fiscal budget will almost double the tax rate on remote iGaming to 40%, starting April 2026. The sports betting tax, excluding horse racing, will increase to 25% in April 2027.

Flutter has projected the adjusted EBITDA impact to be approximately $320 million in fiscal 2026 and $540 million in fiscal 2027 before any mitigation efforts. These figures represent a substantial financial challenge for the operator.

Flutter expects to mitigate some of this impact by reducing operational, promotional, and marketing expenditures, estimating first order mitigation of roughly 20% of the gross impact in the first six months after implementation, rising to 40% subsequently.

Broader market context

The tax rise has affected gambling stocks, with some like William Hill owner Evoke seeing notable share price declines. Conversely, companies with diversified global operations, such as Flutter and Entain have been less negatively impacted due to their international exposure.

The UK budget spared in-person gambling and horse racing from tax increases, and abolished bingo duty from April next year, following concerns over job losses in those sectors.

The increased taxation poses considerable challenges to the UK online gambling market, particularly for licensed operators. Flutter’s response reflects efforts to manage financial pressures while continuing to invest in safer gambling measures.

Sources: Flutter press release