Flutter chief warns significant tax increases will threaten jobs and drive customers to black market

Significant increases in gambling taxes in Britain would threaten jobs and drive customers to the black market, the chief executive of gambling giant Flutter Entertainment has warned.

Peter Jackson's comments came as the parent company of Paddy Power and Sky Bet issued a trading update for the third quarter on Wednesday evening.

Chancellor of the exchequer Rachel Reeves has signalled that gambling duties are set to rise when she delivers the budget on November 26.

The industry has voiced major concerns about proposals from campaigners, including former prime minister Gordon Brown, calling for remote gaming duty and machine games duty to more than double to 50 per cent.

Key takeouts

• Flutter chief executive Peter Jackson warns that a significant tax hike for gambling operators in the budget will cost jobs and fuel the black market.

• Company set to launch a prediction market product in December, allowing it to access US states without regulated sports betting.

• Customers have enjoyed a winning run in sports betting, which has included a $170m impact at the start of the fourth quarter.

Jackson, in a letter to shareholders, said there had been much speculation around potential tax increases in the budget.

He said: "We remain engaged with policymakers and expect decisions will be based on economic merit, taking into account the industry's substantial contribution to UK tax revenues and employment.

"Significant increases to the tax rates would threaten jobs and investment across the UK market, as well as driving more customers to unregulated operators on the black market – where there are no player protections and regulatory oversight.

"We continue to engage with policymakers and await the outcome in the budget later this month, however, should taxes increase, Flutter's growing scale and market-leading position will help to mitigate the impact, and we would likely benefit from the consolidation of share among sub-scale operators over time."

Flutter also announced that it is to launch a new product in the US in December – FanDuel Predicts – which will enable it to operate in states without access to regulated sports betting.

Peter Jackson: "Significant increases to the tax rates would threaten jobs and investment"

Prediction markets, which are similar to exchanges, are regulated on a federal level in the US and have emerged as a disruptor to traditional online sports betting, which is licensed on a state-by-state basis.

Flutter said that group revenue for the period was up 17 per cent to $3.8 billion compared to 2024, reflecting the acquisitions of Snai in Italy and Betnacional in Brazil. Revenue in the UK and Ireland was up one per cent to $853 million.

The company made a net loss of $789m for the quarter, mainly due to an impairment charge of $556m related to its Junglee business in India, where the government has banned real-money gaming, and transaction fees and costs of $204m relating to its purchase of Boyd Gaming's stake in FanDuel, Flutter's US arm.

Flutter also said it had been hit by customer-friendly sports results which had continued into the fourth quarter, resulting in an impact of approximately $170m on adjusted earnings from October 1 to November 9.

The company lowered guidance for the full year, with group revenue now expected to be $16.69bn, with adjusted earnings of around $2.9bn, a reduction from previous guidance of $570m and $380m respectively.

Jackson said Flutter had delivered a "solid" third quarter, with "continued momentum" in both the US and the company's international businesses.

He added: "We're the clear number one operator in the US, and we'll continue to build on that position to drive future profitability.

"Our strategic investments, including the launch of FanDuel Predicts and recent international acquisitions, position us exceptionally well to capture new opportunities and deliver sustainable, profitable growth.

"Our diversified portfolio and disciplined approach give me great confidence in our ability to lead the industry and increase long-term value for shareholders."

David Brohan, gaming and leisure analyst at stockbrokers Goodbody, described the news from Flutter as a "solid" update, despite the impact of sports results, and said the launch of prediction markets was a "smart move".

However, Flutter's share price was down 12.75 per cent at 15,540p at close of play on Thursday on the London Stock Exchange, where the company has a secondary listing.

Read these next:

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‘Come and see what we do’ - betting shop champion’s message to politicians amid fears of tax hammer blow 

New report warns of black market risk from higher taxes and tighter regulation, industry body claims 

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