Subscribe
Share
Share
Embed
A daily podcast delving into the biggest stories of the day throughout the sports betting and igaming sector.
Charlie Horner (00:03.566)
Flutter has announced that 1,400 jobs are at risk as part of a restructuring of its UK and Ireland business. Those jobs are across its Leeds, Dublin, Cluj, and Porto offices, and are as part of a major cost cutting exercise in the midst of tax rises. So today we break down this seismic news and ask what this means for the future of the iGaming sector. Welcome back to iGaming Daily, supported by Optimove, the creator of Positionless Marketing.
Joe (00:03.649)
Watson has announced that 4,800 jobs...
Charlie Horner (00:30.294)
And the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner, and to discuss this with me today, I'm joined by SBC Media's editor at large, Ted Manmuer, and iGaming Expert editor Joe Streter. Ted, welcome back onto the show. How's things?
Ted Menmuir (00:47.744)
Good Charlie, second day on our pod lounge and yeah, another big new story to cover.
Charlie Horner (00:56.312)
And Joe, how how's things? yeah, all good. Charlie, I'd I'd much rather be coming on the podcast to talk about you know, better news. This is very sad news, obviously real real people affected, you know, lives affected. It's yeah, not a nice one to be talking about, but a really important story nonetheless. Yeah, a huge story, a huge story, and again, well like you said there, Joe, s something we'd we'd rather not be covering but but something that that is ultimately the the the the ultimate effect of
Joe (00:56.481)
Yeah, well good Charlie I'd much rather be coming on the podcast to talk about You know better news. This is very sad news. Obviously real real people affected, you know lives affected is it? not a nice one talking about but
Charlie Horner (01:25.602)
Of some of the changes that we've been talking about on the podcast quite a lot. So, first of all, I guess, you know, w when this news dropped today, Ted, what what was your initial reaction? Were you surprised, shocked, a mixture of a mixture of everything? What what was your reaction?
Ted Menmuir (01:40.926)
Yeah, look I want to kind of stand back and be reflective of the sensitivities related to this situation because I think it impacts a kind of flutter but there's also the wider remit of all UK gaming PLCs. Yeah. Okay, can we go again? Yeah.
Ted Menmuir (02:10.281)
Yeah, Charlie, I want to stand back and be reflective of the sensitivities related to this situation. We know that in particular Flutter is undertaking a deep review of its UK portfolio, which is wide and expansive. it even, you know, the fallout even goes out kind of internationally as there's 300 job cuts to be announced in Cluj, Romania. That's primarily served as the UK tech and support hub of Flutter even before.
its formation. So under kind of the previous profile of Betfair. And I've also got to be kind of reflective of what's been reported on by the company. So I looked at kind of revised H1 accounts and I believe that CFO Kevin Harrington
pointed out at the time that the UK tax headwind is now circulating 70 to 80 million per interim since April's RGT tax hike. It's only natural that Flutter enters kind of a defensive mode as it targets or aims to implement a 500 million cost savings programme across the group. But what is really coming to light is that the deep cuts and the initial cuts will also take shape in or take place in the UK.
Charlie Horner (03:33.551)
And then Joe, I'll just ask you the same question. What was your initial reaction really? yeah, obviously of sadness, right? But also that you know, this you know, you asked if this is was a surprise. Obviously to this scale, it is always a little bit of a shock. but I think the fact the industry is moving in this trajectory is not a surprise because the hostility from in the UK towards the gambling industry and towards the regulated gambling industry is
Joe (03:33.75)
Joe I'll just ask you the same question, what was your initial reaction really? Yeah obviously a sadness right but also that you this you know you asked if this was eyes obviously to this scale it is always a little bit of a shock.
Charlie Horner (04:02.514)
yeah, it's it's only escalating. It's getting harder and harder. And just this morning, Ted actually wrote for I Game an Expert around you know, grassroots labor continuing to back a a rising machine games duty. and we know that could potentially come next week. and yeah, that that would only serve to escalate the the the toughening of this environment for gambling operators and we would see more kind of
Joe (04:04.864)
harder just this morning.
Joe (04:20.182)
next week.
Joe (04:26.889)
I remember fucking.
Charlie Horner (04:32.28)
more more cuts like this, more more more damning news like this. And I think at a time when employment is such a focus for for the government, wider employment, this news will resonate. This news will cut through and yeah, who knows what impact it might have. But you know, g gambling operators aren't bluffing. The big gambling operators in the UK aren't bluffing when they say you know, tax rises and astronomical tax rises as well, significant tax rises.
Joe (04:37.488)
important.
Joe (04:53.384)
in the UK aren't bluffing when they say that.
Charlie Horner (05:02.12)
on all all verticals, whether it's machine games or remote gaming duty, are making the UK just unsustainable as a as a regulated gambling market. And I think the news from Flutter this morning really shows that. And yeah, I wonder if you know what impact it might have on on on next week's budget. is it next week or, you know, the budget at the end of the month. I think one thing is for sure it's not, you know, these these Labour backbenches that we've seen lobbying this week
Joe (05:26.73)
Thank
Charlie Horner (05:30.641)
the the ninety something MPs. I you're you're never gonna t change them, you're never gonna get them to kind of le evo ease up on the gambling industry. but yeah, maybe when it comes to the Chancellor and and the Prime Minister, this this news, devastating news for UK employment will cut through and will have an impact. Yeah. I mean fourteen hundred job losses in in one go is I mean that's unprecedented for for what I've seen in the industry since since reporting on it in in the last
in the last few years and yeah, l I think let's take a step back 'cause there's there's lots going on here. we know that the the the budget is next week, but I think this is im it's important to say that, you know, Flutter is is blaming the these job losses on the tax increase that has already been implemented, Ted. What what did Kevin Harrington tell the market as he announced the decision and and I guess how is Flutter planning to mitigate against the impact of that forty percent new normal in in remote
Remote better remote gaming duty.
Ted Menmuir (06:32.735)
Look, when analysing these cost saving programmes, I think we have to view them on a full cycle. And leadership previously outlined that it $200 million savings from our first projections from group cuts. And cuts will be undertaken in the departments of marketing, HR freeze, IT support, retail and operations.
The final cost savings will be revealed by the end of 2027 trading when the program is finally kind of completely kind of totaled up. Again, but even from this initial point, that only kind of tells you part of the picture. For Flutter, it is likely that accounts will be hit by near $100 million in impairments related to UK redundancies. And this kind of tells you.
you know, just how big an impact it is, you know, given the scale of implementing, you know, the redundancy of 1400 roles. To put simply, year-end accounts will not be pretty for Flutter. No one should expect kind of any grace there.
Charlie Horner (07:38.159)
And Joe, we've been looking for for signs, for for glimpses of the impact that the increase on remote gaming duty would have on on these operators and and we've been trying to unpick it as as some of the Q three results have been coming through. We don't need to unpick things anymore and look and look for for little signs and clues. This is a major, major sign that that you know that the health of of the of some of these operators is is is in is in danger, I guess, w when when you see news lines like this come through.
Joe (07:38.942)
Joe we've been looking for
Charlie Horner (08:06.914)
Yeah, exactly. And this is not a, you know, an this is this is a top tier operator, probably the biggest operator in the UK. you know, that's it's there, the the they're impacted. And, you know, you mentioned what Kevin Kevin Harrington said to the market today as the these changes were as this restructuring and these redundancies were confirmed. Let's also look back on what he said prior to the tax rises and when, you know, the the lobbying phase of the the tax rises last year. you know, he warned that this would happen.
Joe (08:07.526)
This is a top tier operator, probably the biggest operator in the UK.
Joe (08:18.038)
...
Charlie Horner (08:36.334)
the the company warned this would happen as they were backed into a corner they would be left with little choice but to do this. and yeah today he was he was damning really damning about the government, damning about the the kind of state of the the UK gambling sector. I think I'm gonna, you know, I'll let me br brush through his quotes a little bit because they are quite important. the the material increase in betting and gaming duties announced in the UK budget last year have fundamentally changed the economic model.
Joe (08:40.118)
noise.
Joe (09:00.982)
have changed the economic model of the industry in the Licensed and unregulated market as we warned a year ago, we cannot fully absorb a rise of the magnitude with how of the magnitude of the remote rise out reducing our fixed cost base and therefore must restructure our business. We can for the future.
Charlie Horner (09:04.63)
of the regulated betting and gaming industry in the UK while helping to fuel the unlicensed and unregulated market. As we warned a year ago, we cannot fully absorb a rise of the magnitude with how of the magnitude of the remote gaming duty rise without reducing our fixed cost base and therefore must restructure our business so that we can best position ourselves for the future. We remain confident that we are well placed to benefit from share gains.
Joe (09:30.32)
that we are well placed to benefit from share games. That's the largest scale operator.
Charlie Horner (09:32.821)
given our position as the largest scale operator in the UK. and yeah there was there was BGC feedback as well. you know that they responded describing it as another devastating blow, talking about the real world consequences. the warnings could not be clearer. Businesses are already cutting jobs. This is from the BGC. closing betting shops and scaling back investment. further tax rises will only accelerate that damage, putting thousand
Joe (09:48.128)
when CS.
is already coming to us.
Joe (09:59.073)
is.
Charlie Horner (10:02.52)
Thousands more jobs at risk, threatening high streets and handing the advantage over to the unsafe, unregulated, illegal gambling market. Ministers must recognise the damage already being done to the regulated sector and think again before imposing further tax rises that will cost more jobs and livelihoods. So they're a you know, a bit more a bit more straight in terms of they are you not using this, but they are warning that.
Joe (10:04.83)
Yes, sir.
Charlie Horner (10:30.932)
if touted tax rises that are you know much speculated about machine games duty come in next week, then yeah this this is only a sign of things to come. and I think you know that there was a group of six large betting ops operating operator bosses. you know they said that the proposals to betting shop taxes to machine games duty would result in as many as fifteen thousand nine hundred job losses and
Almost fifteen hundred betting shop closures with around thirty, thirty five casino closures as well. So, yeah, Charlie, you know, we we spoke a little bit before about, you know, this stage of the budget. very little likely the ink is drying on the the paper in the red briefcase of John Healy, but this type of news, it it would take a lot to to get him to go back into that briefcase and, you know, bring out the tipex and change a few things. But
Joe (11:07.35)
Thanks.
Charlie Horner (11:29.816)
This type of news may well do that because it's so seismic at a time when employment rates are yeah, it's such a focus for the government as well. Hmm. Yeah, it's absolutely damning, really. look, I it those those quotes that you you read there, Joe, from from Kevin Harrington, I think goes to goes to show, you know, Flutter's one of the the biggest and and most well funded operators in the UK, Ted. and if they can't absorb some of the tax hikes, then
Joe (11:32.342)
when employment rates are...
Charlie Horner (11:57.155)
I guess what what chance does anyone else have and how big of a warning sign do you think this is for the wider sector in the UK?
Ted Menmuir (12:05.097)
The wider UK sector needs no warning signs because this has been the cold hard reality of UK gambling in 2025 and its transition to 2026. What is clear and obvious is that leadership is reacting to these accelerated elements that have been driven by tax rises. And let's not forget remote gaming duty has not been determined yet.
but it's been a period of five years of just underlining adjustments given from the gaming machine, from the gambling review, and then accelerated by a doubling in remote gaming duties. Businesses, especially leadership teams, they are cold of heart here and will just look at the kind of bottom line accounts where your first cost controls, they're always gonna come, will always be retail, then marketing.
Where I think perhaps, and I say this really quite snickily, is that is this a siren to the UK government? I doubt it. I don't think there'll be going to be any reversal of plans if the agreement is that they're going to proceed with increasing machine game DTs. Everyone I've spoken to coming back from Lisbon, coming back from the travels.
is that the PLCs are forecasting for the worst case scenario and there really is no middle ground in their decisions. You have to cut and you have to cut this deep.
Charlie Horner (13:45.07)
I mean, yeah, an incredibly deep cut. okay, Ted, Joe, let's take a very short break and we'll come back and we'll continue the discussion and frame it around what might happen next week at the budget.
Joe (13:46.038)
incredibly deep call. Okay Ted, Joe, let's take a very short break and we'll come back and see you next
Ted Menmuir (13:47.306)
Yeah.
Charlie Horner (13:58.113)
Welcome back to iGaming Daily. I think it's it's a I guess it's an interesting note to to make, Ted, that Flutter has announced this decision to to put fourteen hundred jobs at risk. Just three weeks into the tenure of the new CEO, Dan Taylor, how how do you think this story sort of reflects his priorities as the incoming CEO? And what do you think we can read into the health of the wider business?
Ted Menmuir (14:28.457)
Good question. Firstly, we knew that there was no kind of great spirit for Dan Taylor taking on the role of CEO. His circumstances are completely different to the deal making era of Peter Jackson.
And there is no hiding from the importance of the of the greater reset or transformation of flutter, which is really kind of fixating on improving margin. And that cash flow that has been underwhelming during its expansion phrase across multiple markets, be it the US, Latin America's and in certain parts, know, certain European markets, Italy and Eastern Europe. Reviewing kind of flutter accounts.
and Flutter's positions and predicaments at the moment, I return to the importance of the UK market as Flutter's kind of home base, regardless of whether, they've been created to the US. And yes, it doesn't carry the significance of fandial growth in the Americas, but it's always been kind of that safety net for the business.
And it's under threat as many analysts view that Flutter brands are underperforming against PLC competitors, in particular the brands that entail.
So I kind of view kind of the strengthening of the UK market is needed, but it's going to be very costly and very kind of resource constraining. And here I think we're going to understand, you know, what is kind of flutters overall commitment to maintaining its kind of UK dominance, right under, and it's going to be a part big, big assignment for Dan Taylor in which he will be assessed. He has a very, very difficult role.
Charlie Horner (16:09.281)
Yeah, not not an easy not an easy sort of set of cards to have to play. Joe, you you've mentioned it a couple of times already, today so far. Obviously we we do have the budget next week in the UK. we were discussing off air whether, you know, maybe this this announcement comes at a an opportune time just to say to the government, you know, this is the impact of your decisions. You know, government impact government decisions do have an effect and
Joe (16:10.088)
not an easy, not an easy, so.
Charlie Horner (16:37.323)
not the effect that the government would want. What what sort of message do you think this sends to the government who who is considering hiking machines game duty to to forty percent just a year after hiking remote gaming duty and and just a few months away from hiking remote betting duty as well? Yeah, I think it's a a significant message, right? I I I really do, but it's it's important to point out that this is a different government to that of last year.
the the government last year that that took such a extraordinary step and kind of triggered this whole process, this this whole trajectory of turmoil in in the UK market. we we now have a government that is even more hostile towards the gambling sector in many ways and even more kind of welcome to listening to to hostile lobbying voices. so
Joe (17:09.472)
process is the top three.
Charlie Horner (17:29.931)
Yeah, I you know, the the machine games duty is is one that will be in focus next week. and I yeah, may maybe the fate of the industry is sealed on that front and it it it's not going to make for pretty reading. I yeah, also important to note it comes amidst really wider, more challenging economic an eco economic climate for for the UK government. They they have to try and pull the trigger on on wins where they can in terms of
in terms of you know economic input and in in terms of tax input. But I think perhaps what this shows is that the there are significant consequences to such rises in tax that, you know, perhaps will will will have a significant cost on the economy as well. It's not just a case of raise taxes and yeah, bring that money in. there will be a significant cost as well. And I I I think that's what this shows. Mm-hmm.
Joe (18:10.326)
consequences.
Joe (18:18.204)
me as well. It's not just a case of raise taxes and...
as well.
Charlie Horner (18:27.97)
Yeah, remote betting duty going from nineteen to twenty five percent in April, Ted. y you you said earlier that the the the the the cuts are gonna be deep. Do you think we're witnessing a a fundamental reshaping of the entire UK industry over the next twelve months or so? Or do you think we're already w well into that reshaping? Hmm.
Ted Menmuir (18:46.505)
Yeah, we're already well into that. And I think that process began in 2025 with CERs and CFOs aware of the first critical kind of tax judgment of remote gaming duties being doubled to 40%. For me, let's apply it on a long-term lens to UK gambling. And the important question is, where is this market being re-engineered to?
Also, finally, once we get through this cycle, and I think this is important for the BGC, is that they've got to hold the government and its decisions accountable. And whether there will be kind of any recognition or a financial assessment of the impact of undertaking, implementing these taxes, knowing that the first point of call would have been the high street, would have been job losses. So what is the actual real
economic impact of these two budgets back-to-back on the gambling sector. I don't know if we'll ever find out. We've also got to review what we've learned from this process.
I believe in especially reviewing five years of deliberation on the UK Gambling Review is that we never ever tackled UK Gambling's presence on the high street. And that was a manner that was actually left outside because the Gambling Review was primarily focused on its duty towards remote gaming and remote gaming gambling licenses and UK betting and UK bookmaking and casino.
were very much kind of sidelined out of the mandate. I think it's important that again we always have to represent or gaming should always represent themselves as an industry, its impact across kind of society but also its economic view that it's retail, that it's racing, that it's sponsorship, it's the whole package. They only looked at kind of one element of gaming which was online.
Charlie Horner (21:00.919)
Joe, did you wanna come in and and add on onto that? No, no, I think it's a really, really good point. I think yeah, that's what this this this process will have indicated, I think. yeah, that the
Joe (21:00.95)
Joe, did you want to on that? No, no, I think it's a really, really good point. think, yeah, that's what this this this process will have indicated. I think, yeah, that it's hard to get away from that, you know, the wider gambling industry.
Charlie Horner (21:10.419)
it's it's hard to to get away from that now that the the you know the w the wider gambling industry and what what will be affected here. you know, w we know we we saw with warnings from Fred Dunn recently around the sponsorship and pivotal sponsorships that they that Bet Fred had you know, now being impacted. there are wider consequences, when it when it comes to just spike in tax and yeah, we're we're really seeing them take hold now. Well we were going to to come on the podcast today and talk about the
The the letter that you mentioned earlier, Joe, the the one that Alex Ballinger and his group of ninety Labour MPs wrote calling for for a a rise in machines gaming duty. I I guess that feels a little bit small now in comparison to to the news that we're we're we're digesting today. but may maybe we we can just move the conversation a along a little bit by just go piggybacking off what what Ted said about the BGC and and holding the government to account if it
chooses to take that next step and and and hike machines gaming duty in terms of what is the economic impact of this? I it's quite difficult, isn't it? Because you once a government raises taxes on on gambling, it seems unlikely that another government would come in and and cut taxes on gambling. We know what the public perception is. Ted, Ted, do you wanted to t to come in there?
Ted Menmuir (22:33.557)
Yeah, and I'm only reviewing kind of the statements that have been said on this conflict. And I think it started off at the end of the year with this campaign to clean the high streets. Also, Andrew Burnham coming out and saying there are good high street shops and then there are anti-social ones. And apparently we're not in that parameter.
And one of the things that is kind of visible here is that I think that since Labour took on the mandate of the Gambling Review to finalise it, their view was, okay, well, we can't change the actual kind of format, but our judgement will primarily be that of taxes. And I think that...
Perhaps the industry should be more aware of that. What were the options for a new government coming in, taking over this kind generational review of UK gambling? Where would they have gone to? Would it have been different on the Conservatives? I don't know. But it seems to me that Labour took that as a straight option to this is how you govern gaming. It's through the tax route. Joe?
Joe (23:53.391)
Yeah, I think it's not just that they kind of...
Charlie Horner (23:53.433)
yeah, I I you know, I think it's not just that they kind of Andrew Burnham, I should call him Ted, very very formal. I think only his mother calls him that. His mother and you. yeah. It's not it wasn't only the good and the bad, it was the kind of grow it the thriving and the th those that are that that are suffering. And for s for whatever reason, gambling shops were grouped in with other shops, a few other shops that were
Ted Menmuir (24:00.274)
It's funny.
Charlie Horner (24:21.966)
thriving and that that is just fundamentally not true. gambling shops, bookmakers, AGCs are on the downward spiral. They are not growing. so yeah, that that was the the first port of call was, you know, kind of d demystifying that and kind of you know getting rid of that myth that the gambling shops are on the up when when they simply aren't and and that's been seen by kind of shop closures across the board. but
Yeah, it it's it's it's a really challenging one, isn't it? And I think yeah, I I I think in i w with this kind of this this Labour government at the moment, with the such the wide it the massive intake of of Labour MPs, you know, th there are a a lot in in Parliament at the moment and many of them are kind of you know, they're trying to find the issue that defines them, you know, in the the absence of, you know, any avenue to
kind of making it onto the front benches. They're trying to find the issue that defines them. And I I think one of those is kind of lobbying against the gambling industry for for for some of them. and I I think the industry is you know suffering. Ted you called it a conflict earlier and I I think that's what it is, right? There there is a a real battle between the industry, the BGC operators, who are very rarely going to be the good guys in the in the equation when it comes to media narratives and when it comes to just the the wider narrative.
Ted Menmuir (25:44.031)
Mm-hmm.
Charlie Horner (25:46.08)
against kind of backbench MPs who are really dying on that hill that is anti gambling lobbying and lobbying for a more tougher environment for the g gambling industry.
Ted Menmuir (25:58.005)
Mm.
Charlie Horner (25:59.651)
Sorry, Ted, did you want to add something there?
Ted Menmuir (26:03.421)
Yeah, just one final point. Reporting on this this year...
Charlie Horner (26:04.547)
Go ahead.
Ted Menmuir (26:08.319)
think this started off as an issue of council rights and the governance of local businesses and one such is gambling venues. And I don't know where this subject kind of meandered towards a tax debate and a judgment on the actual industry and the economies of the industry itself. Once this judgment's made, I do we return back to that? Is it now, do we go back to like arguing about council rights?
Where do they stand now? Because I it was a campaign to kind clean up the high street and that's what's going to be kind of asked of the Labour government is, is that it?
Charlie Horner (26:43.834)
Well Well they they won that battle, right, Ted? They won, you they've scrapped the aim to permit. They they won that, right? They won that and then they they they kind of went in for round two. And I I think the the wider economic climate that is is so tough for the country at the moment, for the Labour government, I think it made it very easy for for them to look at a machine games duty rise and go, Yeah, let's let's pull that trigger because yeah, just because of the the the wider
Joe (26:45.376)
Well, they won that battle right Ted, won, you know, they scrapped the aim to permit, they won, right?
Charlie Horner (27:11.298)
the wider eco economic climate, but I think they won that battle in terms of cleaning up the high street and I think that that they're gonna win that further by, you know, taxing taxing shops out of out of existence. Well th the question next is, you know, where where does it go after this? You know, w what happens next once you've won the first battle, the second battle, what's the third battle? And I guess that that remains to be seen. But look, it's it's been a huge news day, a difficult news day.
but but Ted, Joe, thanks for breaking it down with me. it's been yeah, important to break this one down and to and to discuss the the impacts of government decisions. Thanks to Optimove for supporting the show as always and to our listeners, thanks for tuning in to today's episode of iGaming Daily. And come back tomorrow to keep up to date with all the latest global gambling news.