Feetham says Gibraltar impact ‘mitigated’ as Paddy Power owner to axe 1,400 jobs after UK tax hikes

The Minister for Justice, Trade and Industry Nigel Feetham, has said he believes the strong relationship with the gaming sector has helped “mitigate the impact on Gibraltar” after Paddy Power owner Flutter announced around 1,400 job cuts in the UK and Ireland following gambling tax rises.

The gambling giant said the proposed job cuts will impact workers in Leeds and Dublin, but there was no mention of whether this would affect employees in Gibraltar.

The restructuring will also impact UK and Ireland staff based at Flutter hubs in Porto, Portugal, and Cluj-Napoca, Romania.

In response, Mr Feetham said he will continue to work closely with the sector to protect jobs and attract new operators.

“As a Government we have built a strong relationship with Gibraltar’s gaming sector because they know how hard I have lobbied the UK Government to defend both the sector and Gibraltar’s interests,” Mr Feetham told the Chronicle.

“While these decisions are not ours to make, I believe the strength of that relationship and the Government’s continued engagement have helped mitigate the impact on Gibraltar.”

“We will continue to work closely with the sector to protect jobs, attract new operators and support the long-term resilience of our economy.”

It is understood the move will hit around 15% of workers in the UK and Ireland, where it employs around 9,000 staff.

Flutter said the overhaul is part of efforts to mitigate costs following a “significant increase” in the UK gaming taxes from last year’s autumn budget.

UK and Ireland boss Kevin Harrington said the group was not able to “fully absorb” the impact without cutting costs.

Plans announced in last year’s UK autumn budget saw the rate of remote gaming duty – the tax on online casino games and slots – increase from 21% to 40% earlier this year.

Firms will also see a new 25% rate of general betting duty for online bets from April next year, up from 15%, as part of the budget changes.

It comes amid speculation that Andy Burnham’s Government could increase the rate of machine games duty, which is the tax on fruit machines, roulette machines and other slot machines, at the next Budget later this month.

Flutter said its restructuring plan is likely to cost between 80 million and 90 million US dollars (£60 million and £67.5 million)

Mr Harrington, Flutter UK and Ireland chief executive, said: “The material increase in betting and gaming duties announced in the UK budget last year has fundamentally changed the economic model of the regulated betting and gaming industry in the UK while helping to fuel the unlicensed, unregulated market.”

“As we warned a year ago, we cannot fully absorb a rise of this magnitude without reducing our fixed cost base and therefore must restructure our business so that we can best position ourselves for the future.”

“We remain confident that we are well placed to benefit from share gains given our position as the largest scale operator in the UK.”