Evoke, the parent company of prominent gambling brands William Hill and 888, has initiated a significant programme of betting shop closures in direct response to substantial tax increases announced in the recent UK Autumn Budget. The gambling giant anticipates an annual cost increase of approximately £135 million due to the new fiscal measures, prompting a comprehensive strategic review that includes exploring a potential sale of the entire group.
Strategic Response to Fiscal Pressure
The company has stated it moved "quickly and decisively" to implement cost-saving measures, with the closure of unsustainable retail locations forming a central component of this strategy. These actions are designed to mitigate the projected financial impact of the government's new gambling duty framework. Current industry estimates suggest the closure programme could affect as many as 200 individual betting shops across the country.
Details of the Budget Tax Changes
The Autumn Budget introduced two major changes to gambling taxation that directly impact operators like Evoke:
- The remote gaming duty will increase significantly from 21% to 40%, effective from April of the coming year.
- A completely new online sports betting duty of 25% will be introduced in 2027, with horse racing being the sole exemption from this levy.
Evoke's board has expressed deep disappointment with these fiscal changes, warning that such substantial tax hikes could have the unintended consequence of driving gambling activity towards unregulated, illegal black market operators, thereby undermining consumer protection measures.
Financial Performance and Market Reaction
The company's recent trading update revealed a mixed financial picture. While the group achieved overall annual revenue growth, fourth-quarter revenues actually declined by 4% compared to the same period last year. A more detailed breakdown shows betting revenues experienced a particularly sharp decline of 22%, though this was partially offset by a modest 9% increase in gaming revenues.
The market reaction to the announcement of shop closures and the strategic review was immediate and negative. Evoke's share price fell by approximately 7% during morning trading following the update, reflecting investor concern about the company's future profitability under the new tax regime.
Future Strategic Direction
The cost-saving measures, including the retail closures, are expected to recoup roughly half of the financial impact caused by the new government policy. Evoke has committed to providing shareholders with a more detailed strategic roadmap in the coming months as it continues to develop and implement its mitigation strategy. The exploration of a potential group sale remains an active component of the board's review, aimed at maximising long-term value for shareholders in a challenging regulatory environment.
