Evoke Plc recently announced to its employees that it plans to permanently close about 200 retail stores in the UK, which accounts for approximately 15% of its total retail assets. The closure will begin in May as part of a broader strategic review that may also include potential asset disposals. To be honest, although this decision is difficult, it seems inevitable against the backdrop of rising tax pressures. Evoke currently operates about 1,300 betting shops in the UK and has been conducting a strategic review since December last year, considering partial or complete sale of the business, as well as "a range of potential alternatives".
Store closure plan concurrent with strategic review
A spokesperson for Evoke stated in a declaration that after a comprehensive review and considering the rising regulatory industry cost pressures, including the significant tax increases announced by the government in last autumn's budget, the company will close a batch of stores that can no longer sustain operations starting from May. The company will provide full support to the affected retail employees. The spokesperson emphasized that these decisions were not made lightly, but actions must be taken under rising cost pressures to ensure the company can continue to invest in core retail assets, retaining suitable stores and locations.
It is noteworthy that Evoke had already announced this decision in January. At that time, then-CEO Per Widerström confirmed the store closure plan in a company trading update. The tax increase measures, including the remote gambling tax, have taken effect today, and the increase in remote gambling tax will be implemented in April 2027. This tax shock has come fast and fierce, catching many retail operators off guard.
Tax increases as a catalyst, widespread industry pressure
In last autumn's budget, UK Chancellor of the Exchequer Rachel Reeves announced significant increases in remote gambling tax and remote gambling tax, directly threatening the survival of retail betting shops. In addition to Evoke, retail operators such as Betfred and Entain also warned that the tax increase could trigger an industry-wide store closure wave. Flutter has already closed 57 stores in 2025 due to the continuous decline in retail business.
An Evoke spokesperson told the media: "These decisions were not made lightly, but under rising cost pressures, we must take action to ensure that we can continue to invest in core retail assets." Plainly speaking, with the tax knife on our necks, not closing stores would mean even greater losses.
Analysts lower expectations, industry outlook is worrisome
Deutsche Bank, in a January analysis report, lowered its EBITDA forecasts for Evoke for fiscal years 2026 and 2027 by 12% and 18%, respectively. Due to high financial leverage, earnings per share are expected to decrease by 40% and 52%. The bank assumes that the growth rate of the UK online business in fiscal years 2026 and 2027 will be only 2.5%, and the profit margin will drop from 23% in fiscal year 2026 to 13% in fiscal year 2027.
Market participants are speculating who or what institution might acquire Evoke or some of its assets in the short term. Ben Robinson, managing partner at Corfai, recently stated that private equity is the most credible buyer for the entire group. However, Robin Chhabra, CEO and President of Tekkorp Capital, believes that the best strategic move for Evoke is to split its international business. He pointed out: "The international division is the real gem—markets like Italy, Spain, Romania, and Denmark offer double-digit growth and are not affected by the Chancellor's new tariffs. Selling these assets is the only quick way to deleverage."
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