Evoke, the London-listed gambling group behind William Hill, has hired Morgan Stanley to examine a possible sale of its fast-growing Italian online gaming business if tomorrow’s Budget delivers the heavy tax increases the industry expects.
The potential disposal, described by industry sources as a contingency plan, could raise several hundred million pounds and strengthen the company’s balance sheet if the Chancellor announces an extensive tax raid on betting operators.
People familiar with the situation said on Tuesday that Evoke would trigger the process only if Rachel Reeves unveils particularly severe fiscal measures aimed at the gambling sector in her statement to Parliament.
Any formal sale would draw strong interest from European operators seeking to expand in one of the continent’s most profitable online gaming markets.
The industry is braced for sweeping changes after recent speculation suggested the Treasury could seek to raise between £1billion and £3billion in extra revenue through higher gambling duties.
The possibility of a substantial tax increase has prompted widespread defensive planning across the sector.
Major operators including Betfred, Flutter Entertainment’s Paddy Power, and Entain’s Ladbrokes are preparing strategies to close large numbers of high street betting shops if duty rises sharply.
Evoke has joined other companies in assessing the most severe scenarios. The group has warned that “any Budget tax increases in the budget would inevitably result in UK retail shop closures”.
William Hill owner eyes sale of Italian arm amid Reeves tax threat
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Last month, Evoke said it was “assessing the potential impact of different overall tax scenarios on our UK operations”, underscoring the level of uncertainty facing the sector.
The Italian division has become one of the company’s most important international assets.
Evoke’s overseas business operates exclusively online across Spain, Denmark, Romania and Italy, with the latter now providing almost one-third of group revenues and around half of group EBITDA.
The Italian market has been particularly strong for the company.
Evoke has said that “888casino continues to outperform both local and omni-channel competitors, supported by new supplier integrations and the roll-out of our proprietary content”.
An October trading update highlighted continued market share gains in Italy, which management attributed to the strength of the 888 brand and its focus on locally tailored games and customer experiences.
Evoke employs more than 7,600 people in Britain, including about 6,500 staff across its retail betting shop estate.
A further workforce of nearly 800 is based at the group’s UK headquarters in Leeds.
The business paid almost £330million to the Treasury last year, an amount representing more than 60 per cent of its UK profits.
The wider industry has warned of the consequences of a significant rise in gambling taxes.
An Ernst & Young study commissioned by the Betting & Gaming Council recently cautioned that the proposed increases could lead to the loss of more than 40,000 jobs across the sector.
The analysis also suggested that higher duties could divert £8.4billion in wagers to unregulated offshore operators and reduce the industry’s UK economic contribution by £3.1billion, while delivering limited additional revenue to the Government.
Companies across the sector will watch the Budget closely, with Evoke’s preparations highlighting the scale of the potential impact on Britain’s gambling market.
William Hill have been contacted for comment.
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