Flutter to Cut Up to 1,400 UK & Ireland Jobs, Blames Tax Hikes

Flutter Entertainment will cut up to 1,400 roles across its UK & Ireland division, citing major remote gambling tax increases.

UK&I CEO Kevin Harrington said the business "cannot fully absorb a rise of this magnitude" without reducing its fixed cost base, claiming the "dramatic level" of the planned layoffs is a direct consequence of the hikes.

The NYSE-listed company says the tax changes will cost it $540 million in adjusted EBITDA next year.

Grainne Hurst, chief executive of the Betting and Gaming Council, said ministers must recognise the damage already being done to Britain’s regulated sector.

"Any further tax increase would heap more pressure on an industry already facing substantial tax rises, threatening jobs, high streets and vital funding for British racing," Hurst said.

"These are not hypothetical warnings. We have already seen betting shop closures at Betfred, further job cuts proposed by Entain and Bet365, and Flutter’s announcement this week that up to 1,400 jobs could be lost."

QMH Advisory founder Steve Donoughue said the Flutter redundancies will not be the last.

"This industry will be decimated, thousands out of work, little tax revenue from gambling… all because we have an ideological puritanical crusade based on bad science and faulty data."

H2 Gambling Capital managing director Ed Birkin said the potential redundancy figure is higher than he was expecting.

Alun Bowden, SVP of strategic insight at advisory Eilers & Krejcik Gaming, argued on LinkedIn that while tax increases were the "big driver", there are likely other factors at play.

"We’ve also seen generally the industry contracting both in terms of growth and the number of operators, with several mergers and acquisitions over the past few years," Bowden noted.

"Most of this M&A was supposed to generate efficiency savings and a lot of this is always a reduction in headcount."

Ollie Woodward, corporate finance director at BDO, said larger operators are using the tax hikes as an opportunity to reevaluate their cost bases and consider M&A opportunities.

"Many of our clients and operators feel that if they can stay strong in this period, there will be market opportunities with some smaller players not being able to effectively live with these tax changes," he said.

Woodward also noted that the automation of roles with AI could have been relevant in motivating the extent of Flutter’s restructuring.

"Operators are rolling out AI efficiencies across different areas of the business, from coding right through to customer support and CRM. This is having a direct impact on the shapes of those teams," he said.

Despite the restructure and its $80-$90 million associated cost, Harrington claimed Flutter was "well placed to benefit from share gains given our position as the largest scale operator in the UK."

Bowden noted the UK is a large market with opportunities for businesses that can adapt, posing a challenge for larger firms to reduce overheads and become agile.

"I just hope that they don’t just focus on the first one," he said of cost-cutting versus agility.

The job cuts span Leeds, Dublin and offshore hubs in Porto and Cluj-Napoca.

The restructuring comes amid intense speculation over a separate touted hike to Machine Game Duty in Britain’s upcoming budget, with MPs and think tanks having suggested it could be doubled from 20% to 40%.