It was the move that launched Flutter into the stratosphere and arguably made them the biggest player in the gambling galaxy, Now UK omnichannel Entain, the highest ranking betting company on the London Stock Exchange, is threatening to follow suit and join their rivals in New York, New York.
That’s the bleak prospect being mooted by Entain bosses if British Chancellor of the Exchequer Rachel Reeves hikes gambling taxes in the coming Autumn Budget, scheduled for this November 26.
And the brutal irony that taxes–not historic corruption charges–may do for the owner of Ladbrokes–arguably the nation’s most iconic betting brand–has not been lost on industry watchers.
While “King” Kenny Alexander, anxiously twiddles his thumbs while he awaits his day in court on twin charges of conspiracy to defraud and conspiracy to bribe, it will be Labour Party taxes–not the massive £585 million (US$784m) fine of 2023 imposed during the Tory administration of Rishi Sunak–that will drive the gambling giant that he effectively created from our shores – and into the welcoming arms of Wall Street.
Budget Black Hole
With Labour currently facing a massive budget shortfall that has been estimated at anything from £30 billion to £50 billion (US$40.2bn-US$67bn), there has been much talk and speculation that the UK gambling industry can help plug a big chunk of the deficit by more than doubling High Street and iGaming taxes to 50 percent.
Former Labour prime minister Gordon Brown, echoing the left-field think-tank the Institute for Public Policy Research, has called for the hike; saying the additional £3.2 billion (US$4.28bn) raised could help combat child poverty.
But Stella David, the latest CEO in the Entain executive hotseat, warns that such a move may have the dire consequences of forcing her FTSE100 company–formerly GVC Holdings–to move its primary stock market listing to New York.
“There are opportunities that exist in the U.S.,” David told paper-of-record The London Times in an interview.
“I’m not saying we are planning to do it right now. But of course we would consider it if the situation meant that it was in the best interest of the company.”
Shop Closures
Isle-of-Man-headquartered Entain employs around 14,700 people in the UK and–as well as running some 2,700 Ladbrokes and Coral High Street betting shops–, the company also owns iGaming brands such as BetCity in Holland, Bwin, Crystalbet, Eurobet, Foxy Bingo, Gala, Ladbrokes Australia, PartyPoker, sportingbet, SuperSport in Croatia, STS in Poland, et al.
Gambling tax increases would compel Entain to “consider its investment level in the UK”, said David. And she conceded: “Could lead to shop closures”.
“There are other markets we [may] have to pivot to as being more worthy of investment. There will be consequences. Having a dislocating increase in tax will have a dislocating impact on the industry.
“At the end of the day we want to make a profitable global business.”
Last year the overall British gambling industry paid some £3.6 billion (US$4.82bn) in taxes to the government, of which Entain, currently worth around £5.44 billion (US$7.29bn) by market capitalisation (half its 2021 valuation), contributed £513 million (£687.56m).
The proposed tax increases, if implemented–and crucially if they don’t trigger a gambling flight to black market operators–would raise an additional £3.2 billion, it’s estimated.
Either way, with deposed GVC/Entain king Kenny Alexander facing his day in court and the wider UK gambling industry facing huge tax hikes, November is going to be a month to remember for the leading light of British betting.
