UK gambling operators are re-examining their positions in the market on the back of recently announced tax hikes. William Hill owner Evoke announced on Wednesday that it is reviewing its strategic options due to the expected impact on profits from the upcoming changes. A possible sale of the entire group or certain business segments, which include brands such as William Hill, 888, and Mr Green, is under discussion.
Evoke’s struggles are well-documented, including a failed US launch, major regulatory fines, and an ousted CEO. The share price has fallen 36% since UK Chancellor Rachel Reeves confirmed the tax increase on November 26. The stock jumped 8% after Wednesday’s announcement of a possible sale.
Evoke warned in the lead-up to the budget that tax hikes could result in the closure of up to 200 retail sportsbooks, leading to significant job losses. Taxes on slots and table games rose from 21% to 40% and sportsbooks now have to pay 25% compared to the previous 15% obligation.
Flutter and Entain are unlikely buyers due to concerns over competition
Evoke is seen as particularly vulnerable due to its reliance on the UK market and its substantial debt pile, following its acquisition of William Hill’s non-US assets in September 2021 for £2.2bn ($2.9bn). Speaking to Reuters, Berenberg analyst Jack Cummings stated that Flutter and Entain are unlikely buyers due to concerns over competition.
