‘The only winners will be the black market’ – Entain warns against betting tax hike

Black market bookmakers will be the only beneficiaries of any increases in betting tax by the government, a leading figure at one of Britain’s biggest operators warned on Tuesday.

Rob Wood, chief financial officer at Entain, the parent company of Ladbrokes and Coral, cited a reported €200 million black hole in expected gambling tax income facing the Netherlands government following a hike in rates as evidence of the impact of “too draconian a regime”.

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Punters would bear the burden of bookmakers maintaining margins as a consequence of higher taxes as “odds get worse, the promotions get worse, generosity gets worse” with this likely to act as a catalyst for increased migration to the black market, Wood added.

The warning came amidst a strong start to the year for Entain, which reported increases in revenue of seven per cent and earnings of 11 per cent for the first six months of 2025, driven chiefly by its online businesses in Britain and Ireland and BetMGM, its joint-venture in the US with MGM Resorts.

Bookmakers face the prospect of increases in duties under Treasury proposals to harmonise the levies on sports betting, which stands at 15 per cent, and games of chance, which is 21 per cent.

The BHA sounded the alarm on the impact harmonisation would have on British racing’s income, with independent modelling showing the sport losing £66m a year if the duties were levelled at 21 per cent climbing to as much as £160m if harmonised at 40 per cent.

Last week, former prime minister Gordon Brown called for betting duties to be increased, including to 50 per cent on casino-style games, in order to raise £3 billion and lift 500,000 children out of poverty.

Former prime minister Gordon Brown believes gambling taxes should be raisedCredit: Getty Images

However, Wood said: “Our sector contributes around £4 billion every year to the Treasury in the UK employing over 100,000 people. When you look at Entain we pay over half a billion pounds to the UK Treasury every single year. That makes us one of the top 20 taxpayers in the country. What's great all around is that the amount of money is growing, so just through industry growth and a thriving sector, tax take is growing.

“From our perspective, any tax rate rises, however it comes about, will result in us mitigating against it, and that only leads to the black market being winners. The obvious way to mitigate, which we would do whichever tax goes up because we're one business in the UK, is through consumers. So the odds get worse, the promotions get worse, generosity gets worse, and the consequence of that is black market operators, who don't pay any tax or have any player protection, pick up customers.

“As evidenced in the Netherlands, it backfires if you put taxes up too high and have too draconian a regime. They have accepted that now over half of the whole market is black.

“From the outside, it's very clear that the losers are the Treasury, the losers are the operators, also sport, because we also have to mitigate through marketing revenues – things like sponsorships go down – employment suffers, so really the only winners are the black market operators. The reassuring thing is we do think that the Treasury knows that and understand that's true.”

While online betting rose 21 per cent in Britain and Ireland year-on-year, retail betting fell one per cent. In June, it was reported that Bar One Racing was in talks to buy Ladbrokes’ 174 betting shops in Ireland and Northern Ireland.

Wood declined to discuss any potential sale, but said retail remained “a great business” for Entain and was part of its “omni-channel experience” that helped raise awareness of its brands and engage customers in shops and online.

Wood also said that Entain “continued to support the greyhound industry, just as we do the horseracing industry” after the company closed Crayford stadium in January.

Revenue for BetMGM grew by 35 per cent year-on-year allowing Entain to upgrade its forecast for its full-year results. The bookmaker expects BetMGM to deliver revenue of “at least” $2.7 billion with ebitda of $150m, up from $2.6bn and $100m respectively when the last forecast was made on June 16.

However, Entain has also set aside approximately A$100m as a contingency while it continues to be the subject of an anti-money laundering investigation by Australian regulator Austrac.

Stella David, Entain's chief executive, said: “Our business is getting stronger, fitter and faster, with these results reinforcing our confidence in driving sustainable underlying growth and generating more than £0.5 billion of cash annually in the medium term.”

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