Domestic gambling giant Paddy Power is to close 57 of its betting shops in the UK and Ireland, with nearly 250 members of staff facing redundancy.
Increasing cost pressures and challenging market conditions have been cited as the main reasons, with the government’s upcoming Autumn Budget likely to present even more problems for the sector.
The chancellor, Rachel Reeves, is thought to be considering a considerable tax raid on the UK gambling industry, hiking the amount paid each year by sports betting firms and other remote operators.
Entain chief Stella David has also warned of shop closures and unemployment if Reeves goes ahead with her plan.
Tax Grab
It’s expected that 29 Paddy Power shops in the UK will close, with a further 28 in the Republic of Ireland and a single site in Northern Ireland set to shutter its doors. The firm has not confirmed as yet where these shops are located.
The closures will result in 247 people being made redundant, although a Paddy Power spokesperson has revealed plans to offer ‘redeployment opportunities’ to those affected.
Although they didn’t reference the proposed gambling tax hike directly, it’s thought that the timing of Paddy Power’s decision is not a coincidence. Their spokesperson commented:
“We are continually reviewing our high street estate, but it remains a key part of our offer to customers, and we are seeking to innovate and invest where we can as we adapt to different customer trends and needs.”
It has been a challenging few years for betting shops on the high street. The clampdown on fixed odds betting terminals in 2019 – which saw maximum stakes reduced from £100 to £2 per spin – saw more than 2,000 shops, which equated to around 25% of all properties, permanently closed.
William Hill were behind 700 of those closures, while the firm was also amongst those badly hit in 2020.
They confirmed that year that 119 of their remaining 1,500 betting shops would not re-open after they were initially closed during the special measures.
In 2024, the cost of living crisis saw conditions on the high street toughen for all retailers, with Evoke – the group formerly known as 888 Holdings, who acquired William Hill’s betting shops in 2022 – reporting first-half losses of an eye-watering £147 million.
Added taxation pressures will likely see many more shops close in 2026 and beyond.
Difficult But Necessary Consideration
The chancellor will harmonise gambling tax across bookmakers and operators like online casinos, bingo providers and poker sites in her budget… but that is expected to be only part of the problem.
Currently, sports betting brands pay 15% on their annual gross gambling yield and online gaming sites 21%. Harmonisation would see bookmakers’ tax bill upped by 6%, however it’s expected that the baseline rate will be increased for both… some government advisors have even suggested a rise in remote duty to 50% to help bridge the ‘black hole’ in the UK’s finances.
Reeves has been quoted as saying that betting firms should be paying their ‘fair share’ on tax, while hinting at the likely revenue grab that is to follow.
Evoke have already warned of further shop closures, with as many as 200 properties – around 15% of their entire 1,300 shop empire – at risk.
“We are mindful of potential tax increases in the forthcoming budget which would impact investment in the UK and drive more customers to the black market,” a spokesperson for the brand commented.
“As part of our ongoing planning, we are assessing the potential impact of different overall tax scenarios on our UK operations. This includes the difficult but necessary consideration for shop closures.”
Meanwhile, Entain – who operator Coral and Ladbrokes shops in the UK – have also hinted at the tough decisions that will have to be made in the wake of tax rises.
Stella David has suggested that shop closures will be a formality, as well as ‘investment being diverted to other countries.’
And the impact could hit punters too, with David revealing to investors in an earnings call this week that Entain would have to cut costs in other areas of the business.
“There are a number of levers we could pull, which include being less generous on bonusing, odds [could] be not quite as good, a reduction in marketing. These are all things that one does to mitigate against unwelcome tax increases,” she said.
Sport could also be impacted, with firms less willing to invest in event sponsorship and commercial partnerships, with horse racing – allied to a cut in betting levy income – likely to be the worst hit.