LONDON, UNITED KINGDOM – Global betting giant Flutter Entertainment issued a stark profit warning on Thursday, November 27, 2025, projecting an $860 million (approximately KSh 112 billion) blow to its earnings over the next two years following the UK government's decision to sharply increase taxes on online gambling. The move, announced by UK Chancellor Rachel Reeves, places the UK among the jurisdictions with the highest gambling tax rates in Europe and presents a significant policy divergence from Kenya, which recently moved to lower taxes on the industry.

In her budget statement on Wednesday, November 26, Chancellor Reeves confirmed that the remote online gaming duty will nearly double, rising from 21% to 40% starting in April 2026. Additionally, the duty on online sports betting will increase from 15% to 25% in April 2027. The UK government stated these measures are intended to address the harms associated with online gambling and are expected to raise over £1.1 billion annually by 2029-30. Bets on horse racing were notably excluded from the increase.

Flutter Entertainment, which operates a vast portfolio including Paddy Power, Betfair, Sky Bet, and the major US brand FanDuel, detailed the financial repercussions in a statement. The Dublin-headquartered firm anticipates a reduction in underlying earnings of about $320 million in the 2025-26 financial year and a further $540 million in 2026-27. In response, the company plans to mitigate up to 40% of this impact by 2027 through significant cuts in marketing expenditure and other cost-saving measures.

Industry Fears Rise of Black Market

The announcement sent tremors through the industry, with share prices for other major operators like Rank Group and Evoke, the owner of William Hill, falling sharply. Industry leaders have voiced strong opposition, warning that the steep tax hikes could have unintended consequences.

Kevin Harrington, Flutter’s UK and Ireland Chief Executive, described the budget decision as a "very disappointing outcome" that will hand a significant advantage to illegal, unlicensed gambling operators. "These black market operators don’t pay tax and don’t invest in safer gambling," Harrington stated, arguing that the increased cost for licensed firms will make unregulated sites more competitive overnight. He pointed to the Netherlands, where a recent tax increase reportedly led to a rise in illegal gambling and a subsequent fall in government tax receipts, as a cautionary tale.

This concern is echoed by data on the UK's existing unregulated market. Studies have indicated that hundreds of thousands of people in the UK already use illegal gambling sites, with billions of pounds staked annually, representing a significant loss of potential tax revenue and a risk to consumer protection.

A Contrasting Approach in Kenya

The UK's policy shift stands in stark contrast to recent fiscal measures in Kenya. The Finance Act 2025, which took effect in July, significantly reduced the tax burden on the betting industry. The excise duty on betting stakes was cut from 15% to a 5% levy on customer deposits, while the withholding tax on winnings was slashed from 20% to 5% on withdrawals. Kenyan authorities project this tax reduction will nearly double government revenue from the sector, from KSh 5.4 billion to KSh 11.4 billion, by encouraging more activity within the regulated market.

While the UK government is tightening its fiscal grip on a mature market to fund public services and address gambling harm, Kenyan policymakers are using tax incentives to stimulate growth and formalize a rapidly expanding sector. The long-term effects of these divergent strategies will be closely watched by regulators and operators globally. For multinational firms like Flutter, the increasingly complex and varied international tax landscape presents both significant challenges and strategic considerations for future investment and operations.