British gambling companies' stocks maintain a careful stance amidst government policy evaluation
Government Proposes Significant Increases in Gambling Taxes, Causing Sector-Wide Sell-off
The UK government is considering substantial increases in gambling taxes, particularly for remote (online) gambling, in the upcoming Autumn Budget. The proposals aim to generate significant revenue and support social causes such as child poverty alleviation.
The Remote Gaming Duty (RGD) is set to rise from the current 21% to as much as 50%, while the Machine Games Duty for slots and gaming machines could increase from 20% to 50%. The General Betting Duty on non-racing bets is also proposed to rise from 15% to 25% to align with horseracing taxes. These changes could potentially generate over £1.6 billion annually [1][2][3].
However, these proposals have caused a sector-wide sell-off in London-listed gambling stocks. Entain dropped 5.8% to 938.00p, with Flutter Entertainment falling 8.1% to 21,060.00p ($267.22). Evoke slid 7.2% to 66.10p, and The Rank Group decreased 4.8% to 147.60p. By Monday, share prices had steadied but showed limited signs of recovery [4].
Some analysts believe the sharp market reaction on Friday may have been premature, but any further government signals ahead of the budget could reignite volatility in gambling stocks. The BGC has opposed steep tax hikes, warning that such increases could drive players towards unregulated markets [5].
The review into gambling taxation will not disclose details at this time, with policy changes to be announced later this year. The Chancellor, Rachel Reeves, has confirmed the review is underway [6]. The Institute for Public Policy Research (IPPR) has proposed these tax increases, which the Betting and Gaming Council (BGC) has labeled as "economically reckless" [7].
In the coming weeks, investor sentiment will likely hinge on corporate updates, including Entain's upcoming results. The news of a potential tax increase has raised concerns about potential profit margin compression, but explicit market response information from the cited sources is not available at this time.
References:
- The Guardian
- City A.M.
- Sky News
- Reuters
- BBC News
- HM Treasury
- Betting and Gaming Council
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