Shares in Paddy Power owner Flutter and other listed bookmakers fell in London on Monday, after a media report that the Labour government in the UK is mulling a £3 billion tax hike for the gambling sector to shore up public finances.

UK finance minister Rachel Reeves is expected to increase some taxes in her maiden budget on October 30th, where these taxes on betting firms could also be announced, the Guardian reported, citing sources familiar with the discussions.

Ladbrokes owner Entain dropped nearly 13 per cent, Evoke, owner of the 888 brands, slumped 14 per cent and Paddy Power owner Flutter slipped 7 per cent in early trade.

Entain, Evoke and Flutter did not immediately respond to Reuters’ requests for comment.

“The clear conclusion here is that higher taxes would be most impactful for Evoke both in terms of magnitude but also given its financial position,” analysts at Berenberg said.

They added that Entain would be materially affected and face a much tighter financial position due to its high leverage, while Flutter would be the least exposed due to its diversification.

Entain was the biggest percentage loser on the benchmark FTSE 100 index, while Evoke shares hit the bottom of the UK all shares index. – Reuters

(c) Copyright Thomson Reuters 2024