Paddy Power owner to cut 1,400 jobs as it ‘cannot fully absorb’ Labour’s gambling tax hike

Flutter, which also owns Betfair and Sky Bet, said workers in Leeds and Dublin would be affected by the major restructuring.

The changes will also affect employees serving its UK and Ireland business from company hubs in Porto, Portugal, and Cluj-Napoca, Romania.

Flutter said it needed to reduce its costs after a “significant increase” in gambling taxes announced in last year’s autumn Budget.

Remote gaming duty, which applies to online casino games and slots, increased from 21 per cent to 40 per cent earlier this year.

A new 25 per cent general betting duty rate for online bets will also take effect from April next year, up from 15 per cent.

Kevin Harrington, chief executive of Flutter UK and Ireland, said the business could not “fully absorb” tax rises of this size without cutting its fixed costs.

He said: “The material increase in betting and gaming duties announced in the UK budget last year has fundamentally changed the economic model of the regulated betting and gaming industry in the UK while helping to fuel the unlicensed, unregulated market.

“As we warned a year ago, we cannot fully absorb a rise of this magnitude without reducing our fixed cost base and therefore must restructure our business so that we can best position ourselves for the future.”

Mr Harrington said his immediate focus was supporting affected employees through what he described as a “difficult and challenging period”.

Despite the job cuts, he added: “We remain confident that we are well placed to benefit from share gains given our position as the largest scale operator in the UK.”

Flutter expects the restructuring to cost between $80million and $90million, equivalent to approximately £60million to £67.5million.

The job cuts follow an earlier announcement that up to 100 Paddy Power betting shops across Britain and Ireland could close amid “economic uncertainty”, putting around 400 further jobs at risk.

The gambling industry is also preparing for possible changes at the next Budget later this month.

There is speculation that Andy Burnham’s Government could increase machine games duty, which applies to fruit machines, roulette machines and other gaming machines.

Other operators, including Betfred, Entain and Evoke, have already announced plans to close betting shops.

They have warned that doubling machine games duty to 40 per cent could make more branches unprofitable.

The possible closures could also affect the horse racing industry, which receives income linked to betting activity.

Regulus Partners has estimated that more than 4,000 betting shops could close if taxes rise further, potentially cutting racing’s annual income from betting by £92million.