Flutter Entertainment announced the closure of 57 Paddy Power betting shops in the UK and Ireland, with 247 employees facing the risk of redundancy. In the UK, 29 shops will be closed affecting 128 people, and in Ireland, 28 shops will be closed affecting 119 people. The company stated that the main reason for the closures is increased cost pressures and a challenging market environment, with plans to complete the closures within the next month. The specific list of stores to be closed has not yet been announced. Flutter mentioned that it will try to offer internal transfer opportunities to some employees, but warned that some may ultimately lose their jobs. This closure plan is consistent with actions by other operators, with Evoke and Entain also warning of potential large-scale store closures due to UK tax increases. The UK government is expected to propose gambling tax reforms in the November budget, considering implementing a single tax rate for remote gambling to replace the current three-tier system.
Closure Plan and Scope of Impact
Flutter Entertainment confirms the closure of a total of 57 Paddy Power betting shops in the UK and Ireland. In the UK region, 29 shops will be closed, including one in Northern Ireland; in Ireland, 28 shops will be closed.
A total of 247 employees will face the risk of redundancy, with 128 in the UK and 119 in Ireland. The company stated that the closures will be completed within the next month, and the specific list of affected stores has not yet been announced.
Company Statement and Employee Placement
A spokesperson for Flutter UKI stated that the decision to close stores stems from "continuously increasing cost pressures and a challenging market environment." The company emphasized that it is continuously reviewing its commercial real estate layout, and physical stores remain a key part of serving customers.
The company commits to "as far as possible" provide repositioning opportunities for some employees, but clearly warns that due to store closures, some staff may ultimately lose their jobs.
Industry Background and Operator Dynamics
Flutter's closure plan is consistent with actions by other major operators. Evoke Entertainment (parent company of William Hill) stated that it is assessing the impact of different tax schemes on its UK business, including the possibility of closing stores.
The Sunday Times reported that if the tax rate is increased, William Hill might close 120-200 stores, which is about 15% of its network of 1300 stores.
Tax Policy and Reform Expectations
The decision to close stores is directly related to the upcoming tax reforms in the UK. The government is expected to propose a gambling tax adjustment scheme in the budget on November 26, considering implementing a single tax rate system for remote gambling.
Currently, the UK operates a three-tier tax rate system, and any tax increase would be an additional burden on top of the new statutory tax base effective April 6 this year.
Entain's Position and Cost Measures
Stella David, CEO of Entain, has indicated the possibility of closing UK retail stores to save costs. Entain owns several gambling brands including Ladbrokes, with a large number of physical stores in the UK.
The company emphasizes that this is a difficult but necessary consideration to cope with cost pressures and potential tax increases, aimed at maintaining business sustainability.
Market Environment and Cost Pressures
Flutter points out that "continuously increasing cost pressures" are the main reason for the closures. The UK gambling industry faces multiple pressures including rising wages, increasing rents, and rising compliance costs.
The challenging market environment has led to a decline in the profitability of physical stores, necessitating an optimization of the network layout to improve overall efficiency.
Employee Impact and Subsequent Support
The affected 247 employees have entered a consultation period, and the company is assessing each individual's placement scheme. Flutter stated that it will provide re-employment support and possible internal transfer opportunities.
Union representatives have been involved in negotiations, striving to minimize compulsory redundancies and secure the best compensation schemes for employees.
Store Network and Strategic Adjustments
Paddy Power has a large store network in the UK and Ireland, and after closing 57 stores, Flutter will continue to operate its remaining stores. The company emphasizes that physical stores remain an important service channel.
Flutter is seeking "innovation and investment" to adapt to different customer trends and needs, indicating possible adjustments to store formats and functions in the future.
Industry Reaction and Expert Views
Industry analysts believe that Flutter's decision reflects the general challenges faced by physical gambling. Rising costs and the shift to digitalization are forcing operators to reassess their physical presence.
Experts predict that more operators may take similar measures, especially if the government implements higher tax policies.
Government Consultation and Policy Impact
Gambling operators are consulting with the government on tax reforms. Industry representatives warn that increased taxes could lead to large-scale store closures and job losses.
The government states that it is considering all opinions, but emphasizes the need to balance fiscal revenue and industry sustainability.
Future Outlook and Possible Developments
The closure plan may just be the beginning of industry adjustments. If taxes are significantly increased, more stores may close, further changing the UK gambling landscape.
Operators may accelerate the shift to digitalization, investing in online platforms and mobile applications, reducing reliance on physical networks.
Consumer Impact and Service Changes
Store closures may affect local communities, reducing opportunities for face-to-face gambling services. Consumers may need to adapt to more digital service methods.
Flutter commits to continuing to serve customers through other stores and digital channels, ensuring business continuity.
