Evoke Reports Q3 UK Retail Growth Amid Uncertainty Over Tax Rate

Evoke, parent company of William Hill and 888, published year-on-year UK and Ireland retail growth of 6% for Q3, ahead of a potential tax hike which could strongly impact its retail business.

The operator’s Q3 UK and Ireland retail revenue of £121.7 million was up from £114.6 million. Online revenue across the two countries went up 1% to £163.3 million, while international revenue improved by 8% to £150.4 million. Total group revenue was £435.4 million, up 5%.

In Evoke’s Q3 trading update, CEO Per Widerstrom said: “With retail continuing the improving trend from Q2, all three divisions were in growth during the quarter.”

Retail uncertainty

The retail improvement comes after the group recently said it was considering reducing its number of betting shops in the UK, with reports indicating the company is prepared to close up to 200 shops. The closures would be a contingency plan in the event of the new Remote Betting and Gaming Duty (RBGD), which is expected to be announced by Chancellor Rachel Reeves in the Autumn Budget on November 26.

The tax would replace the current system of three separate remote betting taxes. Various estimates have been made regarding what the tax rate will be, and while industry insiders anticipate a rate of 21% to 25%, 101 Labour MPs have called for a rate of 50%. The RBGD would come into effect in October 2027 at the earliest, but there is every possibility operators will bring in contingency measures ahead of the implementation.

Shop closures anticipated by other operators

Evoke is not the only UK operator to have been reported to be considering shop closures recently. Earlier this month, Entain CEO Stella David said the Ladbrokes and Coral owner would have to consider its investment in the UK in the event of a tax increase, confirming the possibility of shop closures. Also this month, Betfred Founder Fred Done said even a 35% tax rate would make the operator’s UK retail business unprofitable, and that it could be closed in its entirety.

Meanwhile, Flutter Entertainment is to close 57 of its Paddy Power betting shops across the UK and Ireland. While Flutter said the closures are not directly related to the potential tax rise, it also said any changes to gambling duties could have a “significant impact on jobs and investment.”

A recent forecast by Ernst & Young estimated that a 50% tax rate could potentially put more than 40,000 jobs at risk and lead to £1 billion in annual revenue being lost to the black market.

Year-to-date UKI numbers lagging

Despite the revenue growth for Q3 alone, William Hill’s year-to-date UK and Ireland retail revenue after Q3 is £373.9 million, which has pretty much flatlined with last year’s £373 million. Online UK and Ireland revenue is currently slightly down to £499.5 million from £500.9 million. However, international revenue has climbed 11% to £449.9 million. Total group revenue has increased 3% to £1.32 billion.

Speaking about its 1% online UK and Ireland revenue growth for Q3, Evoke said it was “helped by weaker prior year win margins, offset by gaming (-2%), where 888 performance continues to be a drag on growth as we reduce marketing to target higher marketing returns with strong double digit contribution growth across both brands.”

Overall retail revenue growth was put down to “weaker prior year win margins, and continued strong growth in gaming (+6%) following the rollout of new gaming cabinets earlier this year.”

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