FTSE-listed bookmaker books £488m impairment charge linked to UK gambling tax increases announced in November’s Budget
Britain’s new gambling tax regime has delivered an early blow for Entain, driving the Ladbrokes owner to a wider annual loss despite its core betting operations continuing to expand, reports BritPanorama.
The FTSE-listed bookmaker reported a loss of £681m for 2025, in comparison to £461m the previous year, after recording a £488m impairment related to the UK gambling tax rises announced in the last November’s Budget.
This charge significantly exceeded earlier forecasts, as Entain had previously estimated the augmented duties would result in costs of approximately £200m annually before mitigation measures.
The tax changes, which affect remote gaming and general betting duties, are set to come into effect in April and have emerged as a substantial concern for Britain’s betting sector. Operators warn that these adjustments may squeeze margins and reshape competition within the market.
Despite the setback, net gaming revenue climbed three percent to £5.33bn, as reported by City AM.
Chief executive Stella David stated, “2025 has been a successful year for Entain. We are continuing to drive strong underlying momentum and I am immensely proud of our strategic and operational progress and the results it is delivering.”
The Budget tax increase is expected to weigh on earnings over the next two years.
Entain anticipates these changes may reduce earnings by around £100m in 2026 and £150m per year from 2027, after employing mitigation strategies such as reducing marketing expenditure and promotions. The company has expressed open criticism of the policy.
When the tax increase was unveiled, David cautioned that such a decision risks driving punters towards unregulated betting platforms, damaging an industry that contributes billions to the UK economy.
The firm expects to offset more than half of the additional tax liability by 2027 through cost reductions and operational efficiencies.
Online turnover outside the US is projected to rise between five and seven percent in 2026.
One significant contributor to performance came from BetMGM, Entain’s joint venture with MGM Resorts International in the US.
The operation reported turnover of $2.8bn for 2025, a 33 percent increase year-on-year, and posted earnings of $220m, representing a turnaround of $464m compared to the previous year’s deficit.
This recovery allowed BetMGM to return approximately $270m in cash to its parent companies, providing Entain with a financial boost following several years of statutory losses.
Entain’s results arrive during a turbulent period for publicly traded gambling operators.
Recently, Flutter Entertainment shares dropped significantly after the Paddy Power owner failed to meet expectations and issued weaker-than-anticipated guidance, highlighting a slowdown in growth within the US sportsbook market.
Meanwhile, analysts have begun to monitor emerging prediction platforms like Kalshi and Polymarket, which some believe may undermine the traditional sports betting sector. However, for Entain, the immediate challenge lies within the UK.
The firm must adapt to a stricter UK tax landscape while pursuing its international expansion.
David asserted, “The business has never been in better shape and is well positioned to not only navigate the tax and regulatory challenges facing our industry, but to seize them as opportunities.”
Entain reiterated its confidence in achieving a minimum of £500m in annual adjusted cash flow by 2028.
Entain’s substantial loss amid shifting tax policies underscores the growing challenges facing operators in the UK gambling market. As regulatory pressures mount, the company’s ability to adapt will be critical, particularly against the backdrop of stiffening competition and evolving consumer behavior. The forthcoming tax implementation could reshape the landscape further, compelling industry players to re-evaluate their strategies in this tightening fiscal environment.
