Gambling Stocks Rise in Wake of a Costly Budget

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Gambling stocks defied expectations, rising despite Budget tax hikes set to cost the sector hundreds of millions.

UK gambling stocks proved surprising outperformers in the wake of budget 2025, despite the introduction of sweeping tax increases that analysts said would weigh heavily on sector profitability.

Equity strategists expected sharper declines following measures that will raise more than £1.1 billion by 2029–30 through higher duties on online gaming and remote sports betting.

The government confirmed that Remote Gaming Duty will jump from 21% to 40% in April 2026, while a new 25% duty on remote sports betting, excluding horse racing, will replace the existing 15% General Betting Duty from April 2027. Analysts said the changes hit UKGC-licensed online casino operators hardest.

"Perhaps more surprising was the rise in share prices of gambling stocks such as Entain and Flutter, although the increase in gambling taxes was not unexpected," said Charlie Lloyd, Head of Investments at Shackleton Advisers.

Sector reaction was volatile, with operators issuing guidance cuts and cost warnings.

"Bookmaker stocks are down as they have come out with warnings about the impact of tax hikes on the sector," said Neil Wilson, analyst at Saxo Bank.

"The Chancellor announced yesterday that Remote Gaming Duty is set to increase from 21% to 40% from April 2026, and a new online sports betting duty of 25% will be applicable to sports excluding horse racing from April 2027."

Wilson noted that the financial impact presented by operators was significant: "Flutter reports impact before mitigation to be approximately $320m in fiscal 2026 and $540m in fiscal 2027," he said, adding:

"Evoke, which tumbled yesterday on the news, estimates a hit of approximately £125–135mn on an annualised basis once fully implemented from April 2027 and pulled its medium-term guidance. Entain put the damage at £200mn next year and £100mn this year. Rank, which owns Gala bingo, fell 10% after saying the measures will hurt operating profit by £40mn."

Yet shares in Entain and Flutter rebounded after investors reassessed the longer-term outlook.

Analysts said valuations already reflected substantial pessimism, and some

brokerages flagged improved clarity following the Budget.

Goldman Sachs reiterated its Buy rating on Entain, writing that the UK Budget "helps clear a re-rating path" supported by Online momentum, BetMGM's improving performance and "mid-term FCF transformation."

On Flutter, Berenberg kept its Buy recommendation but cut its price target to 18,100p from 24,200p, noting that the near-term tax burden was steep but offset by strong international growth drivers.

Despite the negative tax shock, investors appeared to draw comfort from the government's decision to shield much of the land-based sector.

Bingo duty will be abolished from April 2026, casino duty bands frozen, and in-person betting kept at the 15% rate to reflect higher operating costs and horse racing levy contributions.

Analysts said the resilience in share prices suggested the Budget had removed uncertainty that had been weighing on valuations through much of the year.