Paddy Power cuts 1,400 jobs and blames betting tax rises

Key points

• Paddy Power owner Flutter is cutting 1,400 jobs, citing tax rises on online betting and gaming.
• UK and Ireland staff, plus British and Irish workers in Portugal and Romania, are affected.
• Remote gaming duty rose from 21% to 40% in April, and online general betting duty will rise to 25% next April.

Paddy Power owner Flutter is cutting 1,400 jobs, blaming higher taxes on betting. The roles at risk have not been disclosed. Staff in the UK and Ireland are affected, along with British and Irish workers at Flutter's sites in Portugal and Romania.

The government announced the tax increases on online casino and sports betting, with an exemption for horse racing, in last November's Budget. Flutter, which also owns Sky Bet and Betfair, employs 28,500 people worldwide, including 9,000 in the UK and Ireland.

What the company said

Kevin Harrington, chief executive of Flutter's UK and Ireland business, said the tax hikes had "fundamentally changed" the economic model of the UK betting and gaming industry, arguing they had helped "fuel the unlicensed, unregulated market". He said the company could not fully absorb a rise of that size without reducing its fixed cost base.

Flutter said it continues to expect the tax increases to have a very significant impact on the overall market. The company delisted from the London Stock Exchange in August, and its shares now trade solely in New York.

As we warned a year ago, we cannot fully absorb a rise of this magnitude without reducing our fixed cost base

— Kevin Harrington

How the taxes changed

Some online gambling tax rises from last year's Budget took effect in April. Remote gaming duty, paid on online casino betting, rose from 21% to 40%.

General betting duty stayed at 15% in betting shops but is set to rise from 15% to 25% online in April next year. Betting firms had warned that cost increases would lead to job losses and shop closures, but MPs dismissed the warnings as "scaremongering".