Flutter Entertainment CEO, Peter Jackson, has warned increasing tax may well have a damming impact on the fate of smaller operators and the growth of the black market.
Speaking to the Financial Times, Jackson emphasised that the heightening of taxes, which have been touted by a myriad of states, will see a rise in costs and the inevitable expansion of the black market.
Jackson was also part of the UK Investment Summit, which hosted some of the key figures from business alongside Chancellor of the Exchequer, Rachel Reeves, who is working to strengthen ties between the Labour government and business.
Off the back of the Summit, Jackson took to Linkedin to state that getting regulation and fiscal policy right are essential to achieving business and economic success. He agreed with former Google CEO Eric Schmidt that ‘UK regulation must be streamlined and implemented at a greater pace under Labour’.
Jackson remains supportive of the implementation of the Gambling Act Review, however, sharing that the regulation ‘requires ongoing collaboration on a number of key areas, but the fact that it was complicated by three years of delay caused great uncertainty for the UK’s sports betting and gaming industry’.
The CEO added: “Consistency around fiscal policy is also paramount as it allows businesses like ours to invest with more confidence. With plenty of speculation around the taxation of our sector this week, it was perhaps timely that I warned of the unintended consequences of high taxes in an interview with the Financial Times published today.
“While my comments about balance were in relation to the US, the point can also be applied to the UK operating environment and elsewhere – setting too high a tax rate reduces competition, weakens the consumer offering, and can lead to a reduction in tax revenue. This is in no one’s interest.
“At Flutter, we stand ready to play our part through our brilliant businesses, such as Sky Betting & Gaming in Leeds and tombola in Sunderland. As a leader in the space, we can help drive the UK’s digital economy and lay the foundations for long-term success, aligning with the Chancellor’s quest for growth.”
The comments from the Flutter CEO come after bleak predictions from analysts over the potential impact of the touted tax rises in the UK market.
Specifically, JPMorgan analysts Estelle Weingrod and Karan Puri both discredited the effectiveness of the plans. A tax hike may well lead to an “exodus of operators” from the subsequently “unattractive” UK market, they assert.They also warned of the new framework driving players to the black market, “defeating the purpose of having a regulated market in the first place”.
They added that it is “also worth noting that generally, more stringent regulation typically offers the opportunity for scale operators to consolidate the industry further as small/sub-scale operators struggle to mitigate the adverse impact as effectively, eventually exiting the market”.
