Britain’s gambling firms are staring down a loaded dice. In recent weeks, the Chancellor has hinted at raising levies on the industry as part of November’s Budget. That possibility has sent a chill through investors, who now see a range of outcomes, all unfavourable.
Two scenarios dominate market chatter. The first would see the current 15% duty on sports betting aligned with the 21% tax already applied to online gaming. The second, and more punitive, would raise the gaming levy further still, to 25%.
Neither is trivial. The latter, in particular, would put pressure on the margins of firms that have grown increasingly reliant on digital casino and slot-machine revenue.
Shares in Flutter Entertainment [LON:FLTR], which owns Paddy Power and Sky Bet, dipped as speculation mounted. Other listed operators — Entain [LON:ENT], owner of Ladbrokes, and 888 Holdings, which runs William Hill — have also come under scrutiny. Together these firms account for billions in market capitalisation on the London Stock Exchange, meaning any tax change has implications well beyond the betting shop.
What will be the potential impact on gambling stocks?
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