Paddy Power-owner Flutter has announced plans to cut up to 1,400 jobs as its boss claimed the company “cannot fully absorb” tax rises imposed on the gambling industry.
Staff based in Leeds and Dublin, as well as workers for its UK and Ireland business at Flutter’s Portugal and Romania sites, will be most affected, but what roles are at risk has not been disclosed.
The government announced taxes rises on online casino and sports betting, with an exemption for horse racing, in the Budget last year.
Flutter boss Kevin Harrington said the tax hikes had “fundamentally changed” the economic model of the UK betting and gaming industry, arguing it had helped “fuel the unlicensed, unregulated market”.
“We continue to expect these tax increases to have a very significant impact on the overall market,” Flutter Entertainment said on Tuesday.
Flutter, which also owns Sky Bet and Betfair, employs 28,500 people across the world, including 9,000 in the UK and Ireland.
As well as its Leeds and Dublin offices, the understands the cuts could also affect staff based in London and Sunderland, as well as Malta and Gibraltar.
Harrington, who is chief executive of the betting giant’s UK and Ireland business, said: “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.”
The has contacted the Treasury for comment.
Flutter delisted from the London Stock Exchange in August in a blow to the UK, with its shares now solely traded in New York.
In its most recent results, the company reported a $299m (£224m) pre-tax loss for the three months to June for its entire business worldwide, compared to a $205m profit in the same period last year.
However, revenues in the UK and Ireland rose by 4% over the period, due to strong growth in online gambling games.
Some online gambling tax rises announced in last year’s Budget took effect in April. This included remote gaming duty, which is paid on online casino betting, rising from 21% to 40%.
General betting duty, paid on the profits made from various forms of sports betting, was kept at 15% in betting shops, but is set to rise from 15% to 25% online in April next year.
Betting firms had warned that cost increases would lead to job losses and betting shop closures, but MPs dismissed the warnings as “scaremongering”.
During the summer, Ladbrokes owner Entain announced job cuts, with news agency Reuters reporting 500 roles were being removed.
Punters’ winnings from gambling are not taxed in the UK, nor is VAT charged on bets.
Flutter said its restructuring plan would cost between $80m and $90m.
The company has claimed in previous financial results that the impact of UK tax rises would hit its underlying profit by $320m this year and $540m in 2027, before any savings or restructure to mitigate the impact.