Flutter Entertainment, the company behind Paddy Power, Sky Bet, and Betfair, announced plans Tuesday to cut up to 1,400 jobs from its UK and Ireland division, and it pointed directly at the British government. A tax on online casino games nearly doubled in April, rising from 21% to 40%. A second increase, pushing the levy on online sports bets from 15% to 25%, lands next April. Flutter's UK and Ireland chief executive Kevin Harrington said the company "cannot fully absorb a rise of this magnitude without reducing our fixed cost base."

The cuts land hardest in Leeds, Dublin, and Sunderland, with additional roles at risk in London, Malta, Gibraltar, Portugal, and Romania. More than 10% of Flutter's 8,960-strong UK and Ireland workforce could go. The company estimates the restructuring will cost between $80 million and $90 million as a one-time charge.

Flutter projects the full tax hit will reduce its underlying profit by $320 million this year and $540 million in 2027, even after savings from the job cuts.

Who's paying for what

The timing matters. The announcement landed one week before the UK chancellor's next budget, and the Treasury is reportedly weighing a further increase to the tax on slot machines. Industry groups are already warning that another rise would trigger a new round of closures and redundancies across betting shops and gaming centres. Ladbrokes owner Entain cut around 500 jobs earlier this year, also citing the same budget measures.

But Flutter's own numbers complicate the story. The company reported a $299 million pre-tax loss globally for the three months to June, compared with a $205 million profit in the same period a year earlier. Yet UK and Ireland revenues actually rose 4% over the same period, driven by growth in online gambling. Flutter's shares climbed more than 2% on the news of the restructuring, as investors priced in the prospect of a leaner cost base.

An anonymous industry insider told the Guardian that Flutter's absorption of Sky Bet, which it acquired in 2026, was likely a contributing factor, with the job cuts partly reflecting the inevitable consolidation of overlapping teams. Many of the losses are expected to fall in Leeds, which was Sky Bet's main operational hub. Paddy Power's own founder, Stewart Kenny, has publicly accused the industry of "scaremongering" to resist higher taxation.

The unlicensed market problem

There is a serious policy argument embedded inside Flutter's complaint, and it deserves more than a passing mention. Harrington argued that steep tax rises push punters toward unregulated, unlicensed platforms that pay no duty, employ no one locally, and carry none of the consumer protections the licensed market is required to provide. If that dynamic plays out at scale, the government collects less revenue than projected, licensed operators shrink, and the people most at risk from problem gambling lose the safeguards that come with regulated platforms. It is the same tension that runs through tobacco duty, alcohol tax, and any other sin tax: set it too high and the regulated market contracts faster than the illegal one does.

The UK gambling industry takes roughly £13 billion from British punters each year. How much of that the government can tax before operators restructure, automate, or relocate is a genuinely contested question. The Social Market Foundation has called for doubling the slot machine levy from 20% to 40%, arguing it could raise up to £460 million. Industry insiders counter that betting shops and casinos would face closures under that scenario, while the lower-overhead gaming centres on high streets would survive relatively unscathed.

For the 1,400 workers now facing redundancy notices, the policy debate is secondary. For everyone else, the outcome of the next budget will start to answer whether this was a one-time adjustment or the opening round of a much longer contraction.