Gambling stocks hit as Rachel Reeves hints at potential tax rises
By Michele Maatouk
Date: Tuesday 30 Sep 2025
(Sharecast News) - London-listed gambling stocks took a hit on Tuesday after chancellor Rachel Reeves hinted at potential gambling tax rises in the November budget.
Flutter Entertainment fell 6.5%, Ladbrokes owner Entain dropped 3.5% and Evoke - formerly 888 Holdings - slumped 3.2%.
In an interview with ITV News on Monday, Reeves said gambling firms "should pay their fair share of taxes - and we'll make sure that that happens".
Alex Smith, VP, Global Lead at Third Bridge, said: "Our experts say the market is bracing for two main scenarios: either aligning the current 15% sports betting duty with the 21% gaming tax or raising the gaming tax further to 25%.
"Both options would weigh heavily on operators, but the latter is seen as the more damaging outcome. Flutter Entertainment and its peers are already deep into scenario planning, testing mitigation strategies to cushion any shock from November's announcement.
"The concern for investors is that the most significant revenue growth in the UK in recent years has come from gaming, not sports. Sportsbooks have struggled to generate fresh momentum, while gaming has delivered steady, predictable margins. A heavier tax burden on gaming would therefore hit UK operators harder than a sports increase, given its growing reliance on digital casino and slots revenue. Our experts stress that they are very reluctant to pass the cost directly on to customers through higher margins or reduced payouts, as this risks losing market share.
"Operators have also responded tactically on the commercial side. Marketing and pricing have become less aggressive, with examples such as rolling back generous offers like "best odds guaranteed." Flutter in particular has scaled back heavily, while Bet365 has limited its offering to specific times. To mitigate tax pressure, companies are recouping losses by adjusting pricing, allowing margins to creep higher over time. Changing customer behaviour has supported this shift, with more players moving toward higher-margin products, partly guided by industry strategy and partly by natural demand."
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