Benchmark Retains Buy Rating on Flutter (FLUT) Despite UK Regulatory Changes

Group 1: Company Overview - Flutter Entertainment plc (NYSE:FLUT) operates as a sports betting and gaming company, offering a range of products including sportsbooks, iGaming products such as blackjack, roulette, slot machines, poker, and rummy, as well as lottery products and sports betting products [4] Group 2: Tax Increases and Financial Impact - The UK Budget announced significant tax increases for online gaming, raising the tax from 21% to 40% by 2026, which represents a 90% increase. Additionally, the sports betting duty will increase from 15% to 25% next year, a nearly 67% increase [2] - The UK Treasury expects these tax changes to generate an additional £1.1 billion per year in revenue by 2029 [2] - Benchmark has reaffirmed its Buy rating on Flutter but reduced its price target from $310 to $285, citing that medium-term profitability will be significantly impacted by these tax increases [1][3] Group 3: Mitigation Strategy - In response to the tax increases, Flutter's management has proposed a two-phase strategy that includes short-term cost-cutting initiatives and longer-term advantages expected from scale, operational savings, and potential market-share gains [3] - Despite these mitigation efforts, the combined effects of the tax rises on sports betting and iGaming represent a substantial structural change for the UK market [3]