Entain to Cut up to 400 Customer Service Jobs Due to Tax Impact in the UK

Entain, a publicly traded international operator, announced that it expects to eliminate up to 400 jobs in its customer service division. This decision aims to adjust the cost structure following the recent increase in the remote gaming tax in the UK, which rose from 21% to 40% in April, and in anticipation of a potential increase in the Machine Games Duty (MGD) in the upcoming autumn budget.

Restructuring in Response to the UK Tax Environment

The measure is a response to the increasing tax pressure on gaming operators in the country. Following the rise in Remote Gaming Duty, the UK Government is considering raising the MGD, currently set at 20% for most Category B gaming machines. For machines with bets of up to £0.20, a reduced rate of 5% applies, while those with minimum bets of £5 or more face a tax of 25%.

Since the tax increase came into effect in April, various operators have implemented cuts and restructurings. In Entain's case, the company had already previously announced a reduction of 500 positions globally, now adding an additional cut aimed at avoiding duplications and forming centers of excellence. According to the company, "the goal is to enhance customer experience and strengthen the financial resilience of the business."

Impact of the Tax Increase on Operators and Employment

The sector has responded with further cuts. Bet365 announced last week that it would eliminate 340 jobs at its locations in the UK and Europe. Other companies, including Flutter Entertainment, Betfred, and Evoke, reported closures of retail locations in response to the tax environment.

Nicole Garrett, director of the Bingo Association, recently warned that the closure of bingo halls would be "an inevitable consequence" if the MGD increases this autumn. Stella David, CEO of Entain, has already raised her concerns in a letter sent to Prime Minister Andy Burnham, emphasizing that "doubling the MGD to 40% would add nearly £100 million to our annual cost in retail operations in the UK."

The Threat of Job Losses and Retail Location Closures

An independent study commissioned by the Betting and Gaming Council from EY predicts that a rise to 40% in the MGD could lead to 1,470 closed betting shops and 15,900 lost jobs. Furthermore, the report estimates that net tax revenue would drop by £120 million.

"These are not theoretical efficiencies in a financial model. They are people losing their jobs and communities losing historic businesses," stated Stella David, CEO of Entain.

The executive also emphasized the social role of retail: "Our employees conduct age checks, are trained to identify signs of problem gambling, and implement customer self-exclusion protocols, all under strict regulation."

Risk of Migration to Unregulated Operators

David warned in her letter that raising the MGD could push activity towards illegal operators. EY’s model indicates that with a 40% MGD, approximately £1 billion in wagers would leave the regulated system. "What is desirable for communities and public tax revenue is to keep gambling within the regulated sector, as well as recover current illegal activity," she stated.

Maintaining activity within the regulated circuit protects jobs and businesses, in addition to converting untaxed income into contributions for the treasury and British sports.

Political Environment: Regulation and Competition in the Sector

The political backdrop has a direct impact. Prime Minister Andy Burnham has shown willingness to reform regulation, considering measures such as removing the ‘aim to permit’ rule, which limits the opening of new betting shops in urban areas. The regulatory climate, along with new taxes, forces operators to adapt their scale and seek efficiency to survive the new competitive and cost framework.

The measures taken and proposed are part of a trend of adaptation in the sector, driven by regulatory and fiscal changes with direct effects on the workforce and the commercial network of operators.