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There are fears that the government will raid gambling companies in a tax raid in the upcoming Autumn Budget later this month.
Shares in gambling firms have fallen that the Chancellor Rachel Reeves is planning to double some taxes which are paid online by bookies and casinos.
Entrain who owns Ladbrokes and Coral saw their share slump 9% on Monday on the FTSE 100 over a report that the Chancellor has suggested she will raise some £3 billion in a Budget tax raid in two weeks’ time.
Entain’s rivals, 888 group Evoke and William Hill saw shares fall 12% and Flutter who owns Paddy Power was down 5% and Rank that owns Grovenor Casinos and Mecca Bingo saw a fall of 5% also on Monday.
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The recommendations for the Budget tax raid were proposed and put forward by the influential think tanks the Institute for Public Policy Research (IPPR) and the Social Market Foundation, PA reports.
Russ Mould, investment director at AJ Bell, said, “Labour is desperately looking for ways to raise revenue, having ruled out increasing taxes on ‘working people’.
“It’s notable that the speculation suggests so-called ‘lower harm’ activities like bingo and the lottery will be untouched by any tax changes.
“The betting industry will argue higher taxes could lead to an increase in illegal black-market gambling and ultimately firms may well pass on any extra costs they incur to punters, potentially doing more harm.”
Mould added the proposed tax plans are a “salient reminder of the strengthening headwinds the sector faces in terms of regulation and tax.”
A spokesman for the Treasury said: “We do not comment on speculation around tax changes outside of fiscal events.”
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