Entain Issues Stark Warning Over Gambling Tax Increases
The owner of major betting brands Ladbrokes and Coral has issued a stark warning that significant gambling tax increases announced by the UK Government will severely damage the industry and shrink the regulated market. Entain revealed it has taken a substantial £488 million impairment charge directly related to the upcoming duty changes, which are scheduled to take effect from April.
Financial Impact and Market Consequences
Entain reported a widened loss after tax of £680.5 million for 2025, compared to £461 million the previous year. The company attributed this deterioration primarily to the £488 million charge linked to the tax reforms. While Entain stated it has the financial resilience to absorb these increased costs, it cautioned that smaller operators in the gambling sector may not survive, leading to a contraction of the legitimate, regulated market.
Chief Executive Stella David described the Government's decision as "extremely disappointing," arguing that it would likely result in lower overall tax revenues for the Treasury, stifle industry growth, and inadvertently benefit unlicensed, black market operators. "One of our asks of the Government and the regulator is to work hard with the industry to stop the rise of the black market," David told the Press Association.
Details of the Tax Reforms
The tax increases were announced by Chancellor Rachel Reeves in the November autumn budget. The reforms will see the remote online gaming duty rate jump sharply from 21% to 40%. Furthermore, the duty on online sports betting – excluding horse racing – will rise from 15% to 25%. Chancellor Reeves justified the hikes by stating that remote gaming is associated with the "highest levels of harm" across the gambling sector.
In contrast, taxes on in-person gambling and horse racing were left unchanged, and the duty on bingo will be abolished entirely. The Government estimates these changes will generate approximately £1.1 billion in additional revenue by the 2029-30 financial year.
Strategic Response and Future Outlook
Despite the challenges, Entain believes its scale will allow it to grow within the shrinking regulated landscape. "There will be less competitors over time… and we’ll be one of them," David stated. The company is implementing measures to mitigate the financial impact, aiming to offset about 25% of the higher tax burden initially, with plans to increase this mitigation to over 50% from 2027. These initiatives include reducing expenditure on third-party services, such as casino content providers.
On an underlying basis, excluding exceptional items like the impairment charge, Entain's earnings before interest, tax, depreciation, and amortisation (EBITDA) actually increased by 7% to £1.16 billion for 2025. The company also reaffirmed its commitment to its physical retail estate, with plans to upgrade around 2,400 betting shops across the UK and Ireland, while acknowledging that occasional closures are part of normal business operations.
Preparing for Major Sporting Events
Looking ahead, Entain is preparing for a surge in betting activity surrounding the men's FIFA World Cup tournament, which will be hosted across the United States, Canada, and South America later this year. David highlighted the event's scale, noting "more countries than ever, more matches than ever, 39 days of intense football." The company is also focusing on catering to "player fandom," where bets are placed on individual player performances during matches, rather than solely on team outcomes.
Investors appeared to respond positively to the company's strategic positioning and underlying performance, with Entain's shares rising by approximately 5% following the announcement.
