International edition
September 19, 2020

Betfair, William Hill and Ladbrokes, among others

Bookmakers' shares fall as UK looks at changing online gambling tax

(UK).- Shares in UK listed bookmakers have come under further pressure after the Government said it would look at altering the way it taxes companies offering online gambling to UK consumers from abroad.

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etfair, William Hill and Ladbrokes were among bookmakers to see their shares fall as analysts warned they could face a 15pc tax on their online profits as part of a new tax regime. The Coalition said it would review taxation on remote gambling following a proposal made last week by John Penrose, the gambling policy minister, that taxation should apply in the location of consumption.

Onshore operators currently pay 15pc gross profits tax and analysts said they expected a similar rate to be introduced for remote gambling. However, some industry sources said such a move risked failure as offshore operators might choose to keep on targeting UK consumers but refuse to pay tax, thereby creating an uneven playing field.

That view sparked calls for onshore taxes to be dropped to benefit UK-based operators, a proposal some said they would take to the Treasury.

Richard Glynn, CEO of Ladbrokes, took a similar line. "UK-based online and retail businesses have long been at a significant tax disadvantage in competing with offshore operators," he said. "We believe this is an opportunity for the Treasury to reconsider the high levels of tax applied to UK gambling operators as well as which rates could be applied to offshore businesses who will continue to enjoy VAT benefits."

Greening said she would make sure that other countries' tax rules were taken into account to prevent UK operators being taxed twice.

William Hill shares fell 2.2 to 217.6p, Ladbrokes was down 4 at 139.2p and Betfair dropped 30½ to 614½p.

Analysts said that the major industry players were likely to benefit from the tax changes in the long term as smaller operators were forced out of the market by higher taxes. The changes are not expected to be introduced for up to two years as they require new legislation to be passed by Parliament.

Meanwhile, the Financial Times reported on Monday night that Andy Hornby, the former HBOS and Alliance Boots chief executive, has taken up the same role at Gala Coral. Coral is the third-largest bookmaker behind William Hill and Ladbrokes.

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