Entain Cuts 500 Jobs as Gambling Tax Hikes Take Hold

One of the UK’s largest employers in the gambling sector has cut 500 jobs as it seeks to mitigate the tax hikes that came into force in April.

Entain, whose brands include Coral, Ladbrokes and BetMGM, has removed the roles as it seeks to streamline as part of cost-cutting measures.

Some of the employees impacted will be offered different roles within the company, but it continues the worrying trend of job cuts in the sector after the Rank Group confirmed they had made redundancies just last week.

Regrettable Organisational Change

It was back in November that the chancellor, Rachel Reeves, announced her controversial tax grab on the gambling industry.

In the first wave of increases, Remote Gaming Duty (RGD) was hiked from 21% to 40%, taking effect as of April this year.

Although Entain’s brands are famed as sports betting sites, primarily, casino gaming still plays a considerable part in their overall revenue generation – hence why the tax rise has had such an impact on their profitability.

They, and others, have been forced to make a series of operational changes in order to mitigate their rising costs, which include cutting back on marketing budgets and, unfortunately, restructuring their workforces.

Entain has confirmed that the job losses will mostly take hold in their product technology department, as well as in group corporate roles. Redundancies will be made in the UK and across the company’s global workforce, with around 2% of their team of 28,000 members of staff cut.

A spokesperson for the firm commented:

“As part of our ongoing focus on enhancing Entain’s operational efficiency and agility, we have begun implementing organisational changes which will regrettably impact a number of roles across the group over the months ahead.

“These changes will help make Entain a stronger, better business and are a further demonstration of our strategic focus on maximising shareholder value. We are consulting with all those affected to support them during this process.”

Cutting Costs

When the tax hike was announced late last year, Entain CEO Stella David revealed that it would hit the company with additional costs of around £200 million each year.

The subsequent operational changes, which include the latest round of job losses, would mitigate for around 50% of that, the company has revealed.

Entain have been seeking other ways of clawing back their financial viability. In June, they revealed that they had sold a 20% stake in their European business to EMMA Capital for around £360 million. The proceeds from the sale will be used to reduce debt.

Although Entain have tried to keep customer promotions and incentives in place as much as possible, they have been forced to cut back on their sponsorship of major sporting events in the UK.

One of the most eyebrow-raising consequences of that was their decision to end their partnership with the Cheltenham Festival; a relationship that dates back more than 50 years.

The Coral Cup has been one of the longest-standing races at the flagship meeting, although Entain has chosen to keep the sponsorship under the same roof – their BetMGM brand took over as title sponsor back in March.

They’re not the only ones to be feeling the pinch and responding with job cuts. The Rank Group, whose brands include Grosvenor Casino and Mecca Bingo, has also been forced to reduce its workforce as a result of tax mitigation.

The firm has significantly reduced its marketing budget and ‘supplier costs’, although the human loss of ‘headcount reductions’ will be the cruellest of the blows.

Rank Group chief Richard Harris confirmed that the cutbacks were a direct response to RGD hikes, although the company was shaping up to have a strong financial year as per their projections.