Flutter Entertainment disclosed that the UK government’s planned increase in online gaming duties will reduce the company’s adjusted EBITDA by approximately $320 million in fiscal 2026 and $540 million in fiscal 2027, before any mitigation measures are applied. The hit reflects the company’s dominant position in the UK market, where it captures a large share of betting and iGaming revenue.
The tax changes raise the remote gaming duty from 21 % to 40 % effective April 1 2026, and introduce a new general betting duty for remote bets, increasing from 15 % to 25 % effective April 1 2027. These rates apply to all online betting and gaming activity conducted in the UK, with the exception of UK horse‑race betting, which remains exempt, and bingo duty, which will be abolished.
Flutter estimates that it can offset roughly 27 % of the 2026 impact and 37 % of the 2027 impact through first‑order mitigation measures, such as cost reductions and operational efficiencies. The company also expects additional “second‑order” benefits from market‑share gains and further efficiencies, which could further reduce the net hit to EBITDA. The projected losses represent a significant headwind for the company’s profitability in its key market.
Kevin Harrington, Flutter’s UKI CEO, warned that the tax increase could hand a “big win” to illegal, unlicensed operators that do not pay tax or invest in safer gambling. He expressed confidence that Flutter’s scale and leading position would allow it to navigate the changes, but noted the potential for increased competition from the black market and the risk of job losses and reduced funding for sports. The comments highlight the broader industry concern that higher taxes may drive consumers toward unregulated platforms.
Market reaction to the announcement was mixed. Shares of Flutter and other UK gambling operators fell sharply on the day of the announcement, reflecting investor concern over the immediate cost impact. By the following day, the stock had partially recovered, suggesting that investors were factoring in the company’s mitigation plans and the potential for market consolidation that could benefit larger operators like Flutter.
The tax increase is part of the UK government’s broader strategy to curb gambling‑related harm, which is expected to raise about £1.1 billion annually by 2029‑30. While the additional revenue will support public services, the higher duty rates will compress margins for operators, especially those with lower scale. Flutter’s ability to offset a sizable portion of the impact through cost controls and market‑share gains will be critical to maintaining its competitive edge and protecting shareholder value in the coming years.
The content on BeyondSPX is for informational purposes only and should not be construed as financial or investment advice. We are not financial advisors. Consult with a qualified professional before making any investment decisions. Any actions you take based on information from this site are solely at your own risk.