UK tax changes projected to reduce Flutter EBITDA in 2026–27

Flutter Entertainment, parent company of FanDuel, Paddy Power, and Betfair, expects UK tax increases on digital wagering to reduce adjusted EBITDA by approximately $320 million in fiscal 2026 and about $540 million in 2027 before mitigation actions.

The UK government confirmed that the online gaming tax rate will rise to 40% from 21% starting in April 2026. The duty on online sports betting, excluding horse racing, will move to 25% from 15% from April 2027. Land-based betting and horse racing taxation remain unchanged.

Flutter stated that the new structure creates a difference in treatment between online and retail activity, which may influence customer behavior. The company also noted that the timeline gives operators limited room to adjust business planning.

The group said it intends to manage the EBITDA impact through a combination of direct mitigation actions and operational changes. First-order measures—including reductions in promotional, marketing, and operational spend—are expected to offset approximately 20% of the gross impact in the first six months after implementation, increasing to about 40% thereafter.

Flutter also referred to potential second-order mitigation benefits, such as operational efficiencies and changes in market share, which may provide additional offset over time.

The company described the tax changes as a significant development for the online gambling environment in the UK and warned that unlicensed operators could become more appealing if the regulated market adjusts pricing or promotions.

“Today’s tax increases are a very disappointing outcome and will have a significant adverse impact on our industry. The Chancellor rightly wants to address harm, but these changes will hand a big win to illegal, unlicensed gambling operators who will become more competitive overnight. These black market operators don’t pay tax and don’t invest in safer gambling,” said Kevin Harrington, Flutter’s UK and Ireland CEO.

“At 40 percent, the UK’s remote gaming duty is now above countries such as the Netherlands, where a recent tax increase saw a rise in illegal gambling and a fall in Government receipts. Despite this impact, I am confident that through both our scale and leading position in the UK, as well as the proactive cost initiatives that we are taking, we are well placed to navigate through today’s changes,” Harrington added.

Other operators also reported expected earnings impacts following the government announcement. Evoke, owner of William Hill, saw share prices fall. Rank Group projected an earnings reduction of around £40 million and said benefits from the abolition of bingo duty would only partially offset higher taxation for digital operations. The firm stated it is “reviewing various mitigating actions for the UK digital business in the context of our profitability, investment plans and the competitive landscape”.

Flutter said it will continue to assess market conditions and long-term strategies as the implementation dates near.