Jefferies analyst James Wheatcroft say the firm’s conversations with investors suggested that a 25%-30% tax rate for both sports and casino was the market’s central assumption, so the firm assumes share prices of UK betting names including Flutter Entertainment (FLUT), Entain (GMVHF) and Evoke (EIHDF) will react negatively to the UK budget’s roughly 35% blended rate. The higher rate of tax for iGaming will likely induce UK consumers to move offshore and creates uncertainty around future revenue headwinds in the UK, while a differential rate between sports and iGaming may not drive the desired outcomes around ongoing sports support given the higher rate of tax for iGaming, adds the analyst, who has Buy ratings on Flutter, Entain and Evoke.
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