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A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Fernando Noodt (00:03.736)
second.
Ted Orme-Claye (00:05.827)
just let me open up the article sorry so I've got it in detail
Fernando Noodt (00:13.105)
All right.
Fernando Noodt (00:20.975)
Your recent update petty
Fernando Noodt (00:25.723)
In a recent update, Party Power management has confirmed the first round of redundancies across its marketing department. The move is linked to wider corporate adjustments ahead of the increase in remote gaming duty to 40%. Party Power's actions from part of broader cost saving measures under scrutiny for AdFlower Entertainment as the FTSE, sorry, I'm going to start all over again. Sorry, Luke.
Fernando Noodt (00:58.616)
Mm-hmm
What's this word? Somber? I haven't ever read... Somber.
Ted Orme-Claye (01:06.746)
a upsetting sort of news.
Fernando Noodt (01:09.633)
okay i'm gonna use it is it somber
Fernando Noodt (01:16.887)
In a somber update, Patty Power Management has confirmed the first round of redundancies across its marketing department. The move is linked to wider corporate adjustments ahead of the increased in-remote gaming duty to 40%. Patty Power's actions, from part of a broader cost-saving measures under scrutiny at Flutter Entertainment as the FTSE giant seeks to improve its profitability,
Ted Orme-Claye (01:17.231)
Somba.
Fernando Noodt (01:45.741)
of its UK and Ireland portfolio. Welcome to another episode of iGaming Daily brought to you by Optimove, the creator of Positionsless Marketing and number one player engagement solution for iGaming and sports betting operators. I'm Fernando Nott, Media Manager for SVC and your host for today where I'm joined for another TED and TED talking time. Ted Memur, Editor-at-large for SVC. How are you today?
Ted Menmuir (02:14.318)
Very well Fernando, in the London office where we are trying to figure out how to work the room temperature. yeah, nothing ever changes.
Fernando Noodt (02:25.659)
Alright, hopefully you'll sort that out soon and Ted Armclay, editor for SVC News, you're not having that issue today as you are recording from remotely, so how are you today?
Ted Orme-Claye (02:26.351)
Yeah.
Ted Orme-Claye (02:41.669)
Yeah, I'm good. Thank you for, yeah, as you say, recording from the flat in Manchester. Yeah, I'm doing quite well, thank you. I had a trip to Nottingham over the weekend to visit the family, yeah, feeling nice and refreshed after that, and glad to get stuck back into another Ted and Ted talking time, as you put it.
Ted Menmuir (02:58.584)
You
Fernando Noodt (03:00.089)
Yeah, that's a title in progress. We're working on it, even though I've been doing it for quite some time now. yeah. Anyways, let's go to the news here. Let's go to what's important because, of course, Party Power has given us something to talk about, which is great from a professional perspective. So Ted, OC.
Ted Orme-Claye (03:05.817)
Ha ha.
Fernando Noodt (03:30.107)
You broke the story on SPC. Can you outline the latest developments regarding body powers redundancy?
Ted Orme-Claye (03:39.205)
So we were shared an email by an anonymous source on Thursday morning. The email was internal. It was confirming that a marketing restructuring efforts are underway at Paddy Power. They would see some changes to the department, including the potential for some redundancies, some jobs being put at risk.
We subsequently reached out to Flutter Entertainment, who our listeners will obviously know as the owner of Paddy Power, which is a UK and Irish retail and online betting and gaming brand. And they did subsequently confirm to us that yeah, these restructuring efforts are taking place. There is the risk of staff redundancies. I mean, this isn't...
In the grand scheme of things, know we'll get into this a bit more, but obviously this isn't massively surprising news in that sense because it's been known for a while that a lot of the big PLCs in the UK, Flutter, Entain, Evoque, being the three main ones we talk about, been looking at, have confirmed that they would be doing marketing cutbacks as a result of the tax rises confirmed back in November by Rachel Reeves.
Ted Menmuir (04:34.136)
Mm-hmm.
Ted Orme-Claye (04:59.517)
Obviously they're looking to protect the bottom lines and they're looking to cut costs and marketing was one of the first places where it was confirmed that cuts would be taking place. So yeah, in that sense, this is not overly surprising, I don't think.
Ted Menmuir (05:03.31)
Mm-hmm.
Fernando Noodt (05:15.439)
Yeah, and the cuts appears to be focused at on marketing discipline. So why has this area of body powers business come under pressure?
Ted Menmuir (05:26.77)
Okay, I just want to say that well done to Ted on kind of providing the full picture of this story and when writing these kind of articles are never easy. So from then going back to why the focus has been on marketing disciplines, I think that when you look at it from, when you look at accounts from the top down, marketing is always the easiest discipline to cut.
But whether it's the most effective is yet to be seen. And we'll see that by the end of year in how kind of Flutter and Paddy Power are going to position to return back to growth. It's been, I think, Paddy Power out of all the...
out of Flutter's UK portfolio is probably the most exposed to the upcoming tax hikes and also its business in terms of efficiency because of its retail unit that is continually under kind of that high street strain. It looks like another area of the business that's going to come under significant transitions in the coming months.
Ted Orme-Claye (06:39.525)
The thing I'd maybe add to build on what Ted said there regarding your question, know, betting like any other industry, the product is what comes first, isn't it? And you don't want to make any cutbacks around product development, around any of that sort of stuff, around solutions, because you don't want, especially for an online bookmaker, you don't want your customers to then, to, you know, to be exposed to your marketing, to be drawn to your site, to your product by the marketing, come into the site, and then suddenly...
Ted Menmuir (06:49.226)
Mm-hmm.
Ted Orme-Claye (07:07.365)
come across a poor quality product that's going to make me think, well, I'm not going on here again. I'll go to one of their competitors. So I think marketing is probably often the first casualty there when companies are looking to reduce margins and so on, because it seems that we can afford to lose promotion. We can't afford to lose top quality product.
Fernando Noodt (07:31.897)
Yeah, and why is it actually this move being so closely scrutinized for Patti Power as one of Flutter's flagship brands for the UK and Ireland considering, especially considering this that you're saying, that marketing is usually one of the first casualties.
Ted Orme-Claye (07:53.83)
I think maybe not heavily scrutinized would be the term I'd use just because like I say, we've kind of known that something like this would be coming for a while. think the thing with Paddy Power though is that marketing has always been very central to its operation, to its company. It's always put a lot of effort into the marketing and branding side of things. They're very well known in both the UK and Ireland for having this quite sort
Ted Menmuir (08:06.135)
You have.
Ted Orme-Claye (08:20.645)
quirky, out of the box, tongue in cheek, often very humorous approach. They've had a few adverts in the past that have been taken down, that have been controversial because they were, I guess, a bit too edgy for want of a better term. If you see their adverts on the TV, on the radio, online, there's often quite a humorous element to it.
They've also been getting very heavily involved in the content marketing side of things. They have a very dedicated content team who you'll see sharing stuff across social media and Instagram, Twitter, X, sorry, the platform formerly known as Twitter, Facebook. There was a thing, a very long running series of done on YouTube that their marketing team's done, is...
like dramatic readings of fan meltdowns and fan reactions on Twitter in response to negative football results. They do specials around the World Cup. Marketing basically is very inherent into what Paddy Power is. So I think that might be a reason why, even though we kind of knew that stuff like this was coming, why there's been some attention around this story.
Ted Menmuir (09:33.518)
I just want to add that as Fernando said, mean, you know, why is this going to be scrutinized? And as Ted mentioned, yes, Patty Power are very strong at marketing, but they're also very pioneering, not just in gambling, but in terms of how they have applied marketing as a core weapon, the amount of coverage they get from their marketing and the bank debunked that they have got from their marketing campaigns to date. And I think that's what actually kind of surprises observers that Patty Power, a brand that
so kind of aligned and dependent on marketing will cut down there first. That's the surprise for, I think, observers of this story.
Fernando Noodt (10:13.687)
And Terem, do you see Party Power as the first operator to move on marketing redundancies and the reduction in advertising coverage?
Ted Menmuir (10:22.656)
No, definitely not. think that's going to be across the board. We already know that every PLC will be revising ad spend and marketing budgets in 2026.
The surprise here or where kind of that trend is to meanders is with the World Cup coming out, what's going to be allocated there? I think that there will be budget and reserve if operators see that they can get an uplift or that becomes the peak of the year in terms of how much is waged on that event. But that is yet to be seen. But the cuts are across the board and marketing seems to be the first point of call.
Fernando Noodt (11:05.187)
I guess, hashtag wait and see. But TLC, do you agree with Ted? it like that?
Ted Orme-Claye (11:13.989)
Yeah, absolutely. mean, like I said, it's not just Flutter who announced, very soon after the budget as well, by the way, like it was almost in the immediate aftermath of the budget. think we were back in the, when was it? was late November, wasn't it? 2025. The kind of the big three of the UK gambling PLCs, Flutter, Evoke and Entain, all put statements out very shortly afterwards saying that they expected to have to...
Ted Menmuir (11:21.056)
Mm-hmm.
Ted Orme-Claye (11:41.382)
make marketing reductions as a big, you know, cost measure, cost cutting measures across the board, but specifically marketing reductions, a very widely touted figure has been 20%. We're expecting to see marketing cutbacks of 20%. So, you know, redundancies coming along with that is, is not too surprising. And we will see some of the other companies do, uh, do the same. You know, we're starting to see, uh, uh, uh, uh, limited at the moment cut back in sponsorships.
who the big example think of entain, the coral cup have ended their sponsorship of that that's going back decades. So that was, that was a pretty significant indicator. I think of what was to come. Although interestingly so far the marketing cutbacks, the sponsorship cutbacks, sorry, only really seem to have been in racing at the moment in horse racing. So I don't know if that's either an indicator of.
Some of these companies thinking well racing partnerships aren't just what they don't drive as much engagement for as football ones. Maybe feel like Betfred obviously the Super League, rugby is a big one for them. They're not driving as much for us as these partnerships. So let's cut those first. Or it could be a sign that racing and betting have had a bit of a fallout from last year. Because there was a bit of a disagreement between the two and how they were approaching lobbying around the tax hikes.
in the run-ups to the tax hike, sorry. But yeah, I think the cutbacks of those sponsorships earlier this year, as well as the statements we have from the big three PLCs in November last year, and then coupled with the confirmation we've had about what's going on at Paddy Power, is a sign that we are gonna see further cutbacks and possibly further redundancies to come, absolutely.
Fernando Noodt (13:26.779)
And we're going to continue to analyze this decision by party power, but Flutter. But hold your horses, because we're going to do a very quick ad break right now, and we will continue with more iGaming Daily right now.
if you have to get water, go to the bathroom, something.
Ted Menmuir (13:43.736)
Good hug, good hug.
Fernando Noodt (13:49.979)
You guys good?
All right, let's get going.
Fernando Noodt (13:58.199)
And we're back with more... Yeah. it's okay. Okay, okay.
Ted Menmuir (14:00.694)
No, no, no, I'll take, I'll take, yeah.
Fernando Noodt (14:06.561)
And we're back with more iGaming Daily to continue discussing the latest developments regarding Party Power and of course the Flutter brand. But how exposed TEDM is Flutter to the April introduction of the new 40 % RGD era and what is the group now facing across its whole UK assets?
Ted Menmuir (14:32.472)
To put it bluntly, it's very, very exposed and look, 40 % RGD, it is a new era and a new reality for gambling PLCs and their management of UK brands. In the case of Flutter,
It already kind of recognized, it already believes that it has its exposure to underlying beta of UK loan will be about 300 to 400 million come end of year. So it's a heck of a lot of big gap to close. I don't think that it views 2026 as a reset from what kind of platform we'll have at the end of the year to kind of improve earnings from 2027 onwards.
The reality is that I think that there's going to be tougher visions across it's every UK brand from SkyBet, Tombola, Betfair and Paddy Power and where it can of squeeze margin, where can it, it can improve margins for profitability. And you really got to close that gap for 2027. There's a lot of things up in the air. And again, I think we're going to revert back to kind of previous podcasts where Ted and I said that the first benchmark of analysis
is for the PLCs this year is UK cuts and how quickly they get implemented.
Fernando Noodt (15:59.213)
And speaking of cuts, this follows SkyBets December announcement that it was reviewing up to 260 rolls as part of its reorganization. So what changes is Flutter now enforcing across its other UK and Ireland brands?
Ted Orme-Claye (16:19.75)
I mean, Flutter is a company that's not, it's no stranger to restructuring as we've seen that. We've seen this occur in previous years. I think that, you know, the change, any changes that SkyBet are just going to be part of a wide, yeah, any sort of wider restructuring they're doing. You know, when you have that many assets, you're constantly going to be looking at how you can.
Ted Menmuir (16:26.028)
Mm-hmm.
Ted Orme-Claye (16:41.12)
utilize them and leverage them in different way, how things can be organized differently that can, yeah, maximize efficiency for you and things like that. I sound like I'm using a lot of LinkedIn terminology right now. Yeah, yeah, yeah. But, you know, last year we saw...
Ted Menmuir (16:53.164)
Go ahead, go ahead.
Ted Orme-Claye (17:02.938)
I believe we saw SkyBets HQ relocated to Malta last year as well. Obviously that was coming in the midst of all these conversations about UK tax. Probably I think at the point where it was decided it was almost inevitable we were going to see some sort of tax increase on the industry. So maybe that relocation to tax, you know, more tax like Malta wasn't, wasn't, it was connected to that. yeah, like Flutter is a company that's always doing restructurings. And I think there's always a
Possibly we would have seen things like like the one that occurred at sky bed regardless of Regardless of tax burdens anyway, you know, they're constantly looking at how they might be able to do things better So I'm not really too sure what else I can add to that one
Fernando Noodt (17:47.483)
And of course these are drastic actions, but we cannot say we are surprised about it because UK listed gambling groups already warned about this type of decision back in Q1. So how do you expect these measures to play out through 2026 and beyond, Ter M?
Ted Menmuir (18:08.173)
In 2026, we'll find out. We'll find out how leadership, and this is the big question, where they're probing and where they're to cut. Beyond, and I just like to kind of point this out to audiences, is that the market is being reshaped. And I think these cuts might reorder the market. Now, this is going back to the analyst calls we had in Q1.
There is a lot more strewn on leadership, but I think what the, you know, the banks and analysts are viewing in the market is that there is still a potential to gain market share and to kind of reorder the market and to find out, know, who, which it'd be interesting to see which brands actually take market share after, know, after the cuts are implemented. Does that favor Flutter and its portfolio or the likes of Entain or even a kind of, you know,
kind of mid-tier challenger brands. This market is going to look very, very different in 2027.
Ted Orme-Claye (19:17.158)
If I can just build on what Ted said, think, yeah, I agree with him very much there. on topic of us, I think we can expect to see more marketing cuts this year. I think we can unfortunately expect to see some more redundancies, probably some job losses. I think something else to keep an eye on is how the knock-on effect that the increase in online gaming tax will have on the retail betting industry.
Obviously retail betting was excluded from these tax sites, including in the, in the planned increase in general, betting duty in next spring in 2027. But with a lot of these companies that have both online and retail assets, there is still the risk that they might look to change things up with their retail with the retail side of things, which is a, you know, the bricks and mortar sector has been struggling for a few years anyway. So
Maybe we should expect some more sharp closures, again, sadly, some job losses on that front as well. And yeah, what Ted mentioned, the interesting thing for us to keep an eye on, I reckon, as this goes on is yeah, that overall restructuring of the market and the fact that a lot of the, all of the PLCs have said, yeah, these tax rises are going to be bad for us. We're going to have to cut back budgets. We're going to have to do restructuring as we're expecting to lose a lot of money.
but maybe we'll be able to carve out more market share as smaller operators are forced to withdraw because of the heavier burdens. The thing is they're all saying that, so they are still going to be competing against each other to do that. And bit like Ted said, we have also seen some mid-level companies express some confidence that they might be able to win some market share off the bigger companies that are subsequently, as we've just discussed for past 20 minutes, been engaged in restructuring efforts.
So there is going to be a bit of a battle for market share as a result of this, think. And it'll be interesting to see how that pans out and whether any cutbacks to marketing will affect that. Because obviously marketing is there to put your brand front and centre to the public.
Fernando Noodt (21:21.595)
So I reckon it's safe to assume and safe to say that this could be a reset for how major operators approach staffing, approach brand investment and video buying in the UK market. What do you think?
Ted Menmuir (21:36.846)
100%. Again.
going back to this kind of theme of a new era. However, I think that in terms of leadership and in terms of kind of investor expectations, I think you're to get a much, much bigger emphasis on the ROI of media buying. noted at the beginning that he's seen cuts in sponsorship, especially horse racing. And I think that could be just down to the brutal reality
that there are better ways to spend your money and look margins are thinning and it all kind of comes down to just blunt maths. What is working? What is kind of getting you kind of beta and profits on the bottom line? And where do you build your kind of base from? I certainly think that this market has become a lot more cutthroat in its mentality.
Fernando Noodt (22:39.905)
And tell them how will Flutter's heritage and home market portfolio be transformed in 2026 and beyond, course, as UK gambling adjusts to this new reality.
Fernando Noodt (22:55.451)
to them.
Ted Orme-Claye (22:56.08)
soon.
Fernando Noodt (23:02.167)
You are to them to ass in my mirror. Yes
Ted Menmuir (23:10.028)
Love.
Ted Menmuir (23:14.938)
Hey, all right. Good question to end the podcast. As we mentioned previously, Fluxa has got the biggest brand portfolio and in that, it's got four very unique brands that you can see in Paripar being one of them. And we talked about the Paripar utility and marketing.
I think that, FACTA leadership is revising kind of all angles of the business, right? What we know is that I think they're of going to try and kind of centralize more integrations and better the operations of how the portfolio functions as a whole. But does that mean that it uses kind of dynamism of each brand? yet to see. Again, another theme that we go back to, how will this market kind of evolve in 2027 and what do you need
to get out of 2026 to position yourself for that market share. This is a time of big, big queries and big questions being asked of leadership. And we're gonna see who really has the smarts in the market. I don't know what Ted wants to add to that.
Ted Orme-Claye (24:34.598)
Yeah, I don't really know what else to say of them. What we've already said, this is going to be a huge reset period for the industry. We're going to see, yeah, again, like I said earlier, a battle for market share in this this new era. And companies are going to have to think very they're going to have to put a lot of thought into strategy and do the whole to use another like, let's say, let's say to use another LinkedIn phrase, think smart and not harder sort of thing, something like that. They're going to have, yeah, we're to have put the people going to have to put
put a lot of thought into how they're going to approach this. And I imagine they already have been, obviously. But yeah, it's going to be a very defining year for the industry in this country.
Fernando Noodt (25:12.493)
It's certainly going to be a very important and busy year for the UK gambling industry after the new tax regime was announced and of course these measures being taken by gambling PLCs are not going to stop probably. So if you want to keep up to date with all happening in the UK and the world, the worldwide gambling industry, make sure you are subscribed to all SBC media newsletters as well as to
iGamingDaily on your preferred podcasting platform. Also follow us on social media. But that has been all for today. Thank you very much, Ted Memir, Ted Ormclay. Thank you very much, Luke Miles for producing this podcast. I'm Fernando Nott and to our listeners out there, we'll see you in the next one. Goodbye.