UK Gambling Tax Hikes Could Impact Market Stability, Warns Flutter CEO
Peter Jackson, CEO of Flutter Entertainment, cautions that proposed tax increases on online gambling in the UK could drive smaller operators out of business and push consumers toward unregulated markets. He emphasizes the need for balanced regulation to avoid these unintended consequences.
Peter Jackson’s Warning on Tax Policy
In a recent interview with the Financial Times, Peter Jackson expressed his concerns regarding the potential impact of higher taxes on the online gambling industry. “It was perhaps timely that I warned of the unintended consequences of high taxes in an interview with the Financial Times”, he stated.
Jackson argued that such measures would likely result in increased operational costs, leading to the growth of the black market as consumers seek cheaper alternatives.
Jackson shared his views during the UK Investment Summit, where he engaged with key business figures, including Rachel Reeves, the Chancellor of the Exchequer. The event aimed to foster a stronger connection between the Labour government and the business sector.
After the summit, Jackson wrote on LinkedIn that proper regulation and fiscal policy are key to business and economic success. He also agreed with former Google CEO Eric Schmidt, who called on the UK to simplify regulations and implement them more quickly under the Labour government.
Uncertainty in the Industry
Despite his support for the Gambling Act Review, Jackson noted, “The industry faced great uncertainty due to the three-year delay in implementing the regulation.” He called for continued collaboration to address outstanding issues, particularly those relating to tax consistency. “Consistency around fiscal policy is also paramount as it allows businesses like ours to invest with more confidence”, he highlighted.
Jackson also highlighted the broader implications of high taxes, noting that excessive taxation can weaken competition, reduce consumer options, and ultimately decrease tax revenue.
“While my comments about balance were in relation to the US, the point can also be applied to the UK operating environment and elsewhere—setting too high a tax rate reduces competition, weakens the consumer offering, and can lead to a reduction in tax revenue. This is in no one’s interest”, he remarked.
Reaffirming Flutter’s role in the UK’s digital economy, Jackson said, “At Flutter, we stand ready to play our part through our businesses, such as Sky Betting & Gaming in Leeds and tombola in Sunderland. As a leader in the space, we can help drive the UK’s digital economy and lay the foundations for long-term success.”
Analysts’ Concerns Over Market Exits
Analysts from JPMorgan, Estelle Weingrod and Karan Puri, have also raised concerns about the potential tax hikes. They warned that such measures could lead to a decline in operator numbers and market attractiveness, with smaller companies struggling to adapt or choosing to exit.
The analysts cautioned, “More stringent regulation typically benefits larger operators, allowing them to consolidate the industry as smaller operators struggle to adapt and eventually exit the market.” They further emphasized that such changes could push players toward the black market, “defeating the purpose of having a regulated market in the first place.”
