Betting Giant Behind William Hill and 888 Could Be Sold After Reeves’ Budget Tax Raids

Background on Evoke and Recent Developments

The betting giant, Evoke, which owns William Hill and 888, is currently under the spotlight following the Chancellor’s Budget proposals. The company has announced that its directors are undertaking a strategic review of their options, including potential sales. This move comes in response to significant changes in gambling regulations aimed at increasing tax revenues.

Impact of Proposed Tax Hikes

Evoke warned that changes to online gaming duties and new sports betting taxes could lead to an increase in its duty costs by up to £135 million annually from 2027. These measures, as outlined by the Labour Party’s Rachel Reeves, are expected to bring in £1.1 billion but may have adverse effects on companies like Evoke.

Strategic Review and Financial Advisers

In light of these potential financial challenges, Evoke has appointed Morgan Stanley & Co. International plc and Rothschild & Co as its joint financial advisers to conduct a strategic review. This decision was made in response to the updates announced on the day of the Autumn Budget last month. The share price of Evoke dropped more than 36% following this announcement.

Share Price Reaction

The news that Evoke could be sold sent its shares soaring, with a rise over 10% after the announcement. This reflects investors’ interest in potential changes to the company’s ownership structure amid regulatory pressures.

Industry Concerns and Broader Impact

The gambling industry has expressed significant concerns about these tax hikes, warning that they could lead to job losses, shop closures, and a shift towards illegal betting. The industry fears that up to 40,000 roles across various sectors may be at risk, with more than 3,400 betting shops potentially closing.

Regulatory Impact

The proposed measures include increasing online gaming duties from 21% to 40%, and sports betting taxes from 15% to 25%. While the Chancellor has kept duty rates for in-person activities like shop gaming terminals, pool betting, and horseracing at 15%, other changes could significantly impact Evoke’s operations.

The industry fears that these tax hikes will cause significant damage, leading to higher costs and potentially driving punters to illegal sites. Analysts predict a potential diversion of over £6 billion into the black market, increasing its share from 9% to as high as 140%. The industry’s main body, the Betting and Gaming Council (BGC), has warned that these measures could cause significant disruption.

Government Response

The Treasury argues that despite these changes, their reforms will still raise £1 billion annually. However, the BGC contends that this figure underestimates the long-term impact of reduced tax revenues due to job losses and closures in the regulated sector.

The Chancellor’s proposed measures have sparked a major campaign by The Sun to save “Our Bets,” which has garnered support from politicians across the spectrum, including Conservative leader Kemi Badenoch and Reform chief Nigel Farage. The campaign is urging the Chancellor to reconsider her plans, emphasizing the potential for job losses and damage to high streets.

Conclusion

The proposed tax hikes on gambling could significantly reshape the industry, with Evoke being at the forefront of these changes. As the company embarks on a strategic review, the outcome will not only affect its future but also have broader implications for the betting sector as a whole.

The situation is closely watched by investors and stakeholders alike, who are keen to see how these measures play out in the coming months. The industry’s resilience and adaptability will be put to the test as it navigates this new regulatory landscape.