Flutter Entertainment plc, the leading online sports betting and iGaming operator, has taken note of the changes to gaming taxation announced by the UK government in its autumn budget. The changes include a significant increase in online gaming taxation, with iGaming increasing by 19 percentage points to 40 percent effective from April 2026, and sports betting (excluding horseracing) increasing by 10 percentage points to 25 percent effective from April 2027.
The adjusted EBITDA impact of these changes for Flutter, before mitigation, is expected to be approximately $320 million in fiscal 2026 and $540 million in fiscal 2027. In the near term, Flutter expects the overall mitigation opportunity to be similar to recent precedent, with a greater relative opportunity for second-order mitigation offsetting a moderately lower relative level of first-order mitigation.
For both online sports betting and iGaming tax increases, direct first-order mitigation, including reduced operational, promotional, and marketing spend, is expected to be approximately 20% of the gross impact in the first six months post-implementation, rising to approximately 40% thereafter.
The expected approximate first-order mitigation impact by year is as follows:
- In 2026: $85 million (27% mitigation)
- In 2027: $201 million (37% mitigation)
The net impact is projected to be $235 million in 2026 and $339 million in 2027, with an expected 40% mitigation at the exit in 2027.
Kevin Harrington, UKI CEO, expressed disappointment in the tax increases, highlighting their significant adverse impact on the industry. He also mentioned the potential for Flutter to deliver material second-order mitigation benefits, including market share gains, as well as additional operational efficiencies to help offset the impact in the medium-term.
Despite the impact, Harrington expressed confidence in Flutter's ability to navigate through these changes, leveraging both its scale and leading position in the UK, as well as proactive cost initiatives to address the challenges.
These changes are expected to have a very significant impact on the overall market, with Flutter emphasizing the potential for second-order mitigation benefits and market share gains to offset the impact in the medium term. The market has reacted to these announcements by moving the company's shares 2.04% to a price of $199.92. Check out the company's full 8-K submission here.
