Flutter executive warns UK tax rises are pushing punters to black market

Flutter Entertainment, the owner of Paddy Power and Sky Bet, has set out plans to cut as many as 1,400 jobs across its UK and Ireland division, and its chief executive for the region says the changes stem directly from tax increases introduced by Rachel Reeves.

Kevin Harrington said the rise in betting and gaming duties announced in last year's budget had "fundamentally changed the economic model of the regulated betting and gaming industry in the UK while helping to fuel the unlicensed, unregulated market". He said Flutter had warned a year ago that it could not absorb an increase of this scale without cutting its fixed costs, and that restructuring was needed to position the business for the future.

The cuts will fall on staff in Leeds, Dublin and Sunderland, with further redundancies expected in Porto and Cluj-Napoca. Flutter employs 8,960 people across the UK and Ireland, meaning more than one in 10 of that workforce could lose their job, according to the Guardian.

The restructuring announcement, reported first by the Guardian, lands a week before chancellor John Healey's first budget, in which he is weighing a further rise in machine games duty, the levy on slot machines. Industry figures have warned such a move would cost thousands more jobs.

Reeves raised remote gaming duty from 21% to 40% and online sports betting duty from 15% to 25% in her 2025 autumn budget. Entain, which owns Ladbrokes, and Evoke, the parent of William Hill, have both pointed to those changes when explaining weaker results or job losses.

Not everyone in the industry accepts that framing. Paddy Power's founder, Stewart Kenny, has accused operators of "scaremongering" over jobs to resist further tax increases, according to the Guardian. One unnamed industry insider told the paper that Flutter's long-running integration of Sky Bet, bought in 2020, was also likely to be driving the cuts, saying government policy changes ran alongside existing restructuring that was always going to mean job losses.

Flutter expects the redundancy programme to cost it $90m (£67.3m) as a one-off charge. Its shares rose more than 2% in early US trading, with investors apparently welcoming the prospect of a leaner operation.

The Social Market Foundation, a cross-party thinktank, has proposed doubling machine games duty from 20% to 40%, arguing this could raise up to £460m for the Treasury. Adult gaming centres, the 24-hour slot machine venues found on many high streets, are seen as a likely target for any such rise. Prime minister Andy Burnham has been a prominent critic of the sector, and the Guardian has previously reported on practices in gaming centres that disproportionately cluster in deprived areas.

Industry insiders cited by the Guardian suggest gaming centres, which carry lower overheads than betting shops, could weather a duty increase more easily than bookmakers or casinos, which would be more exposed to closures. The gambling sector takes an estimated £13bn a year from British customers, and leading figures have told Healey to expect further contraction among major operators if machine games duty rises in next week's budget.