Paddy Power-owner Flutter has announced plans to cut up to 1,400 jobs as its boss claimed the company “cannot fully absorb” tax rises imposed on the gambling industry.
Staff based in the UK and Ireland, as well as British and Irish workers at Flutter’s sites in Portugal and Romania will be affected, but what roles are at risk has not been disclosed.
The government announced increased taxes on online casino and sports betting, with an exemption for horse racing, in the Budget last November.
Flutter boss Kevin Harrington said the tax hikes had “fundamentally changed” the economic model of the UK betting and gaming industry, arguing it had helped “fuel the unlicensed, unregulated market”.
“We continue to expect these tax increases to have a very significant impact on the overall market,” Flutter said on Tuesday.
Flutter, which also owns Sky Bet and Betfair, employs 28,500 people across the world, including 9,000 in the UK and Ireland.
Harrington, who is chief executive of the betting giant’s UK and Ireland business, said: “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 company delisted from the London Stock Exchange in August in a blow to the UK, with its shares now solely traded in New York.
Some online gambling tax rises announced in last year’s Budget took effect in April. This included remote gaming duty, which is paid on online casino betting, rising from 21% to 40%.
General betting duty, paid on other forms of sports betting, was kept at 15% in betting shops, but is set to rise from 15% to 25% online in April next year.
Betting firms had warned that cost increases would lead to job losses and betting shop closures, but MPs dismissed the warnings as “scaremongering”.
Punters’ winnings from gambling are not taxed in the UK, nor is VAT charged on bets.
