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Flutter, the owner of Paddy Power, has revealed intentions to reduce its workforce by as many as 1,400 positions. The company’s chief executive highlighted that the business “cannot fully absorb” the recent increases in taxes applied to the gambling sector. Employees located in Leeds and Dublin are expected to be heavily impacted, along with staff working at Flutter’s UK and Ireland operations in Portugal and Romania. Specific details on which job roles are at greatest risk have not been provided.
The UK government implemented tax hikes on online casino and sports betting activities last year, excluding horse racing, as part of its Budget. Kevin Harrington, Flutter’s boss, stated that these tax changes have “fundamentally changed” the economic framework of the UK’s betting and gaming market. He also suggested that the tax increases may have inadvertently encouraged growth in the unregulated and illegal gambling market. Following the announcement, Flutter emphasized that it “continues to expect these tax increases to have a very significant impact on the overall market.”
Flutter, which also owns Sky Bet and Betfair, employs around 28,500 people globally, with 9,000 staff based in the UK and Ireland. Beyond Leeds and Dublin, the potential job reductions could also affect employees in London, Sunderland, Malta, and Gibraltar. Harrington, who oversees Flutter’s UK and Ireland businesses, explained the company’s need to restructure, saying, “As we warned a year ago, we cannot fully absorb a rise of this magnitude without reducing our fixed cost base and therefore must restructure our business so that we can best position ourselves for the future.” The Treasury has been contacted for comment on these developments.
After delisting from the London Stock Exchange in August, Flutter’s shares now trade exclusively on the New York Stock Exchange, marking a notable shift for the company within the UK. The firm’s latest financial report showed a pre-tax loss of $299 million (£224 million) in the quarter ending June, contrasting with a profit of $205 million in the same period the previous year. Nonetheless, UK and Ireland revenues increased by 4%, driven by growth in online gambling games. Some of the tax changes introduced last year came into effect this April, including an increase in remote gaming duty from 21% to 40%. While general betting duty remains at 15% in physical betting shops, it is due to rise to 25% for online betting next April. Betting companies had previously warned that such tax increases would lead to job cuts and closures of betting shops, although some MPs dismissed these concerns as “scaremongering.” Flutter estimates that its restructuring initiative will cost between $80 million and $90 million and has projected that the tax rises could reduce its underlying profit by $320 million in 2024 and $540 million in 2027, prior to any cost-saving measures
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