Paddy Power owner blames tax rises for plan to shed up to 1,400 jobs

Flutter Entertainment has announced a restructuring that could eliminate up to 1,400 jobs. Its UK and Ireland division is expected to suffer most, although redundancies are also planned in Porto, Portugal, and Cluj-Napoca, Romania. The cuts affect the business behind Paddy Power and Sky Bet.

Leeds, Dublin and Sunderland are specifically named. Leeds may face especially heavy reductions because it was Sky Bet’s main operations centre. Flutter bought Sky Bet in 2020, and the companies have since been integrating their brands and operations.

The exact number of job losses at each location has not been given. Flutter expects the restructuring to cost $90m (£67.3m) as a one-off charge. The company says the cuts will reduce its fixed-cost base after major increases in UK betting and gaming duties.

Flutter employs 8,960 people in the UK and Ireland. The company’s domestic market is expected to bear the brunt of its restructuring, which could involve up to 1,400 job cuts across its operations.

If more than 10% of the UK and Ireland workforce loses work, the reduction would exceed roughly 896 jobs. The article does not give a final domestic total, so the 1,400 figure should not be treated as entirely UK-based. Some redundancies are also expected overseas.

The scale matters because it shows how sharply the company is responding to higher costs. Flutter says increased gambling duties have changed the industry’s economic model. It plans to reduce its fixed-cost base, while investors welcomed the prospect of a leaner business.

Betting and gaming duties are taxes imposed on gambling businesses or gambling activity. They affect the economics of offering products such as online casino games and sports betting. Higher duties leave operators with less money from the same level of customer activity.

Rachel Reeves increased remote gaming duty, which applies to online casino games, from 21% to 40%. She also raised duty on online sports bets from 15% to 25%. Flutter described these increases as significant and said they fundamentally changed the industry’s economic model.

The changes matter because gambling companies must decide how to absorb, pass on or offset the extra tax. Flutter says it cannot fully absorb the increase without cutting fixed costs. Other companies, including Entain and Evoke, have also blamed Reeves for weak results or job reductions.

Fixed costs are expenses that do not quickly change with the number of bets or games played, including much of a company’s staffing and office base. When gambling taxes rise, each pound of gambling revenue produces less money to cover those costs. Flutter says the increase was too large to absorb fully.

Its response is to restructure the business and reduce its fixed-cost base. The announced redundancies are the clearest example. Flutter expects the process to create a one-off charge of $90m (£67.3m), but investors still pushed its shares more than 2% higher in early US trading.

Flutter says this will position it for the future and help it benefit from market-share gains. The company also argues that higher duties are fuelling unlicensed, unregulated gambling. Critics, however, question whether tax policy explains every cut.

The article presents two possible explanations for Flutter’s job losses. The company blames the significant rise in gambling duties. But an industry insider says the cuts also reflect Flutter’s ongoing integration of Sky Bet, which it bought in 2020.

Integration can involve combining brands, teams and offices. When businesses bring operations together, some roles may overlap. Leeds was Sky Bet’s key operations centre, so its employees may be particularly exposed as Flutter reorganises the combined business. The insider said government policy changes ran alongside this existing integration.

That creates a dispute about cause. Stewart Kenny, Paddy Power’s founder, accused the industry of scaremongering about jobs to avoid paying more tax. Flutter insists the duty increases fundamentally changed its economic model. Its rising share price suggests investors saw possible benefits in a smaller, leaner operation.

Higher gambling taxes increase operating pressure across the regulated market. Industry figures warn that more rises could cause further contraction among major operators. The article specifically links possible closures to betting shops and casinos, which may have less ability to withstand higher costs.

Adult gaming centres could fare differently. They have lower overheads than betting shops, so some insiders believe they could survive a tax rise relatively unscathed. The Social Market Foundation has called for the levy to double from 20% to 40%, potentially raising £460m. Such centres are a major target for that proposal.

Flutter says higher duties can fuel unlicensed, unregulated gambling. That could shift activity away from regulated operators and reduce the tax base. The article also notes concerns about adult gaming centres clustering in deprived areas and alleged exploitative practices, adding a social dimension to the debate.

In a regulated market, taxes change the return companies receive from each sale or bet. Businesses may respond by cutting staff, closing sites, combining operations or trying to pass costs to customers. Workers then face fewer jobs, while customers may change where or how they spend.

Flutter provides a clear example. After duty increases, it says it cannot fully absorb the extra cost while keeping its existing fixed-cost base. It is therefore restructuring and reducing jobs. Flutter also says higher taxes can fuel unlicensed, unregulated gambling, suggesting some customers or activity could move outside the regulated system.

The effects are not uniform. Adult gaming centres may cope better because they have lower overheads, while betting shops and casinos could face closures. The article also shows that companies may have other motives, such as integrating Sky Bet, making the tax impact difficult to separate from strategic cost-cutting.