With the threat of a tax hike hanging over the UK’s gambling industry, some of its biggest operators are tightening their belts and taking evasive actions.
Sky Bet’s parent company Flutter has shifted the UK sportsbook’s headquarters from London to Malta, a clear and decisive move that could shave millions of pounds from its tax obligations to the UK.
It has not gone unnoticed by former prime minister Gordon Brown, who has asked MPs on the Treasury Select Committee to look into whether betting companies are using loopholes to avoid paying UK tax.
At the same time, William Hill has quietly revealed among its terms and conditions that there will be 13 country market closures from December 2, a cost-cutting measure that will affect customers in Africa, Latin America and Asia.
Sky Bet Could Save £55 Million
Dan Neidle of Tax Policy Associates (TPA) provided the technical research for an ITV News report into Sky Bet’s possible tax avoidance by moving to Malta.
Neidle estimates that the way Sky Bet has structured its move to Malta could result in saving the company £55 million in tax payments based on last year’s earnings.
Instead of setting up a Maltese company to run the business, Sky Bet established another UK company SBG Sports Limited with a branch in Malta.
An international company in Malta can effectively pay a much-reduced level of the 35% corporation tax levied on local businesses, with the rate coming down to as little as 5%.
Based on Sky Bet’s FY24 profits which were subject to the UK’s 25% corporation tax, this move would have resulted in a potential saving of £31million.
Neidle also outlined a potential VAT loophole which would reduce VAT on Sky Bet’s marketing budget that, again based on last year’s declared figures, could have saved a further £24 million.
Flutter’s response to ITV News and TPA did not deny that they had created a scenario where they would avoid hefty VAT duties, but instead spoke of market challenges.
“Flutter paid more than £700 million in taxes to HMRC last year and we employ over 5,000 people across the UK including almost 2,000 in Leeds and 600 in Sunderland,” read their reply.
“As with most global businesses around the world, we are constantly striving to remain competitive and efficient and to give ourselves the best chance of success in an incredibly challenging environment.
“The challenge we face is only made harder by the recent Gambling Act Review, the significant rise of illegal, unregulated black-market competitors and the possibility of tax rises in the Budget.
“In June this year, after migrating Sky Bet onto the same technology platform as our other brands, we decided to move a number of commercial and marketing roles to our commercial centre in Malta – where Flutter already employs over 750 people.
“This decision was made for a number of strategic and commercial reasons and will have some tax implications.
“But Flutter is committed to the UK and Sky Bet will continue to pay UK corporation tax on its profits.”
Gordon Brown reacted to the ITV News report by saying it raised “serious concerns about potential tax avoidance that warrant thorough investigation”.
William Hill Withdraws From 13 Countries
William Hill’s parent company evoke posted a strong outlook for FY25 when reporting group figures for the third quarter of this year.
This was despite saying that it would have to consider closing up to 200 of its William Hill high street betting shops with 1,500 jobs at risk should Labour increase gambling tax levies in the November 26 budget.
It is a doom-ridden glimpse of a tax-heavy future that has been repeated by the likes of Betfred, which warned that 7,500 jobs would be at risk in its own operation and Paddy Power, whose recent shop closures could be the first of many for the UK betting trade.
In addition to William Hill, evoke’s other brands include 888 and Mr Green and while the UK and Ireland remain the key operating regions, other core markets from the group’s International division include Italy, Denmark and Romania.
The timing of its decision to shutter its business in 13 niche markets just a week ahead of the UK Budget appears to support evoke’s warning that the business would need to streamline its costs in the face of tax increases.
These are the 13 countries across three continents which are affected:
- Africa: Angola, Burkina Faso, Cameroon, Kenya, Mozambique, Nigeria, Republic of Congo, Democratic Republic of Congo and Somalia.
- Latin America: Bolivia and Nicaragua.
- Asia: Nepal and Vietnam.
Customers in these countries have been told that from December 2 they will no longer have access to William Hill’s services.
All wagers up to that date will be honoured, but anything still open at that point will be voided and the stake will be reimbursed.
Accounts will remain open for one more month to allow users to withdraw any remaining monies before full closure on January 5, 2026.
Evoke is not deserting these regions entirely as in 2022 it made a strategic investment to launch the 888 brand in Africa.
That involved establishing a newly formed 888AFRICA joint venture with five local industry veterans, so it could be argued that withdrawing the William Hill brand will avoid having two group entities fighting for market share in the same regions.
All eyes now turn to Labour Chancellor Rachel Reeves and next week’s Budget.
She is widely expected to announce a revision of UK gambling tax laws and increase levies, with the main question being, by how much?
