William Hill Owner Evoke Hit by £46M Tax Hike Amid £243M Takeover
William Hill Owner Evoke Hit by £46M Tax Hike Amid £243M Takeover
Evoke, owner of William Hill, faces a £46M tax blow & earnings slump as it gears up for a £243M takeover by Bally's Intralot. What's next for the gambling giant?
London-listed gambling giant Evoke, the company behind popular brands like William Hill and 888, is navigating turbulent waters as it faces a substantial £46 million hit from increased gambling taxes. This financial blow comes as the firm prepares for a significant £243 million takeover by Greek gambling powerhouse Bally’s Intralot. The news underscores the mounting pressures on the UK's online betting sector.
Evoke's financial results paint a clear picture of these challenges. In the six months leading up to June 30, the company reported a 10% slump in underlying earnings, which dropped to £150.2 million. On a pre-tax basis, losses widened further, reaching £80 million compared to £77.7 million in the previous year. This downturn is largely attributed to the UK Government's decision to hike remote gaming duty from 21% to a hefty 40% starting this April.
Adding to future concerns, former Chancellor Rachel Reeves also announced a new 25% online sports betting duty, set to commence in 2027, covering all sports except horse racing. Evoke has previously warned that these combined changes could inflate its annual duty costs by up to £135 million from 2027, presenting a formidable financial hurdle for the company.
In response to these fiscal pressures, Evoke has already taken drastic measures. The firm closed approximately 200 betting shops in May as part of a broader strategy to cut costs and mitigate the impact of the tax increases. Despite the significant challenge, Evoke claims it has managed to offset over half of the gaming duty hike through a combination of more effective, albeit lower, marketing investment, improved promotional efficiency, and operational cost savings.
The £243.1 million takeover bid by Bally’s Intralot, valuing shares at 52p each, was agreed upon just two months ago. Both companies indicated that the recent increases in UK gambling taxes and the intensifying competition within the market have created an "opportunity for consolidation." This move highlights a broader trend in the industry where firms are looking to merge and streamline operations to better withstand regulatory and economic headwinds.
The future of Evoke, under its new potential ownership, will undoubtedly be shaped by these ongoing tax reforms and the evolving competitive landscape. For now, the company remains focused on adapting to the new fiscal reality while preparing for its new chapter with Bally’s Intralot.
