Evoke, the parent company behind major betting brands William Hill and 888, has announced immediate "quick and decisive" measures including retail shop closures and significant cost reductions to counteract the financial impact of recent government changes to gambling taxes. The strategic move comes as the debt-laden group continues to explore potential sale options in a challenging market environment.
Budget Changes Prompt Strategic Review
The company initiated a comprehensive strategic review last December, directly following Chancellor Rachel Reeves' announcement of substantial tax increases for online gambling operators. Evoke has stated it has acted swiftly to mitigate what it describes as the "significant blow" from the November Budget, implementing both retail betting shop closures and group-wide cost-saving initiatives across its operations.
Financial Impact of Tax Increases
Last year, the company warned that new online gaming duties and a fresh online sports betting tax would dramatically inflate its annual duty costs by as much as £135 million from 2027. Evoke had previously indicated it anticipated offsetting approximately half of these tax increases through store closures, alongside potential "changes to the customer proposition" and supplier efficiency improvements.
While the exact number of sites already closed was not confirmed on Tuesday, the company had previously suggested that up to 200 locations could be shut down if gambling taxes were raised. The closures represent a significant restructuring of the company's physical retail presence across the United Kingdom.
Executive Response to Budget Measures
Per Widerstrom, chief executive of Evoke, expressed strong disappointment with the Budget outcome: "We were very disappointed with the outcome of the UK Budget in November that dealt a significant blow to both Evoke and the wider regulated industry. We continue to believe these tax increases will negatively impact the industry's economic contribution, customer protection, and will ultimately serve to support further growth in the illegal black market."
He added: "As a result of these significant UK tax increases, the board is assessing its strategic options, with a resolute focus on maximising shareholder value. We have moved quickly and decisively to execute on our mitigation plans including the closure of retail stores that are no longer sustainable as well as broader cost savings, and we will update shareholders on our progress and updated strategic plan in due course."
Specific Tax Changes Announced
In the Budget, the Chancellor raised remote gaming duty from 21 per cent to 40 per cent from April next year. Additionally, there will be a new online sports betting duty of 25 per cent, which will cover all sports except horse racing, from 2027. These substantial increases represent the most significant changes to gambling taxation in recent years and have sent shockwaves through the regulated industry.
Trading Performance and Market Reaction
In an update on trading, Evoke revealed that fourth-quarter revenues were 4% lower on a constant currency basis compared with a year earlier, when trading was boosted by company-friendly sports results. However, the company noted that revenues of £464 million were 7 per cent higher than the previous quarter, indicating some recovery momentum.
Betting revenues proved the hardest hit in the quarter, declining 22 per cent year-on-year, while gaming revenues showed more resilience with a 9 per cent increase. Despite these mixed results, the firm said it expects to report a rise in full-year revenue of about 2 per cent to £1.79 billion, demonstrating some underlying business strength amid challenging conditions.
The market reaction was immediately negative, with shares in the firm falling 7 per cent in morning trading on Tuesday as investors digested the implications of both the tax increases and the company's restructuring plans. The decline reflects broader concerns about the gambling sector's profitability in the face of increased regulatory and tax pressures.
