Flutter Response to Tax Changes within UK Budget

Core Viewpoint - The UK Government's recent changes to online gaming taxation will significantly impact Flutter Entertainment's adjusted EBITDA, with expected impacts of approximately $320 million in fiscal 2026 and $540 million in fiscal 2027 [1][2]. Tax Changes and Financial Impact - Effective from April 2026, the iGaming tax will increase by 19 percentage points to 40 percent, while from April 2027, the sports betting tax (excluding horse racing) will rise by 10 percentage points to 25 percent [5]. - The adjusted EBITDA impact for Flutter is projected to be $320 million in 2026 and $540 million in 2027, with first order mitigation expected to be around 27% in 2026 and 37% in 2027 [2][6]. Mitigation Strategies - Flutter anticipates that direct first order mitigation, including reduced operational, promotional, and marketing spend, will account for approximately 20% of the gross impact in the first six months post-implementation, increasing to about 40% thereafter [2]. - The company expects to leverage its scale and market position to achieve material second order mitigation benefits, potentially gaining market share and improving operational efficiencies [2][3]. Industry Context - The tax increases are viewed as detrimental to the industry, potentially benefiting illegal gambling operators who do not pay taxes and do not invest in safer gambling practices [3]. - The UK's remote gaming duty is now higher than in countries like the Netherlands, which has previously seen a rise in illegal gambling following tax increases [3]. Company Overview - Flutter Entertainment is a leading online sports betting and iGaming operator with a diverse portfolio of brands, including FanDuel, Sky Betting & Gaming, and PokerStars, generating $14,048 million in revenue globally for fiscal 2024, a 19% year-over-year increase [9].