Flutter ponders closure of 100 Paddy Power shops due to higher taxes and “economic uncertainty”

Flutter Entertainment has become the latest UK gambling giant to show its scars from the recent remote gaming duty (RGD) rise as the business confirmed that up to 100 Paddy Power shops are “under review”. The now-solely-NYSE-listed firm stated that “approximately 400 roles could potentially be put at risk of redundancy” as it implements cost-cutting measures to mitigate the near-doubling of RGD. Business Post reported earlier that these stores will close, and Flutter said that “impacted colleagues will be offered redeployment opportunities where possible”. It is the latest example of Flutter making cuts at Paddy Power. Earlier this year, an email revealed to SBC News showed that the company was restructuring Paddy Power’s famous marketing department. The company attributed that towards the RGD rise, and it has done the same following the revelation of this review. Flutter also cited “fierce competition” and “economic uncertainty” as factors which played a part in initiating the review. It did, however, reiterate that its retail operations remain an important segment of the wider group. “We are incredibly proud of our high street estate, and it remains a key part of our business in communities across the UK and Ireland,” a spokesperson for Flutter UK and Ireland said. “Unfortunately, we have had to take the extremely difficult decision to conduct this review.” Shop closures follow revelation of “clear mitigation plan” The news follows Flutter’s underwhelming Q2 results which saw the Paddy Power, Sky Bet and Betfair owner swing from a $37m profit to a $296m loss year-on-year. It was also revealed that Peter Jackson will leave his position as Chief Executive Officer to be replaced by current Flutter International CEO and President, Dan Taylor. UK and Ireland (UKI) revenue grew 4% YoY in Q2 to $971m and Jackson later stated that Flutter is confident in “substantially increasing UK market share” as smaller operators feel the pressure of tax rises. The firm is the UK’s market leader through its three major brands on these shores and Jackson explained that it has “a very sustainable and clear plan to mitigate the tax changes”. “We’re going to keep our foot down hard on the marketing and generosity side and we have other ways that we can help mitigate some of the increase in costs,” he said. Flutter becomes latest gambling giant to cut estate This review is a prime example of that mitigation strategy and it was always likely that some of Flutter’s UK retail estate would be one of the first dominoes to fall. Various other tier-1 operators in the UK, including Betfred, Entain and evoke, have made similar moves via high street shop closures. Prime Minister Andy Burnham has made his opinion clear on betting shops, labelling them as “dodgy businesses”, adding another layer of uncertainty to UK retail betting, which is already showing signs of decline according to the Gambling Commission. “The high street trading environment has been challenging for a number of years given rising costs, fierce competition, economic uncertainty and the shift to online but we also face a material impact from the higher gambling taxes announced in last year’s UK Budget,” the Flutter spokesperson continued. “Our immediate priority at this time is to support those colleagues affected by this announcement.”