Entain, the owner of Ladbrokes, Coral and BetMGM, is preparing to cut about 400 customer care jobs as the gambling group faces higher UK taxes and the prospect of further increases in duties on gaming machines.
The company has started a consultation process that could affect about 20% of its 2,000 customer care roles.
Entain Chief Executive Stella David said the proposed changes were intended to ensure the “business remains competitive, financially resilient, and well positioned for the future as our sector faces an increasingly challenging operating environment.”
“This decision has not been made lightly, and our immediate priority is to support those of our colleagues who may be impacted through this transition,” she said.
The planned cuts come weeks after Entain reported £479 million ($644.17 million) in underlying operating profit for the six months to the end of June, 2% below the previous year but ahead of investor expectations. The company attributed the performance partly to cost cuts and the soccer World Cup rush.
Entain has linked the job cuts partly to higher gambling taxes in Britain. Last November, gaming duties were raised to 40% and online sports betting levies to 25%, according to the supplied material.
The industry could face further tax increases on gaming machines in the October budget.
In a Sept. 11 letter to Andy Burnham, shared with Reuters on Wednesday, David warned that doubling Machine Games Duty (MGD) from 20% to 40% would add about £100 million ($134.48 million) to the cost of running Entain’s UK retail business.
“A further doubling of Machine Games Duty would therefore add another significant cost to businesses already struggling to absorb major tax increases, stacking the odds against labour-intensive high-street operators,” David said.
Entain said such an increase could result in 1,470 betting shop closures and 15,900 job losses across the UK.
The Social Market Foundation estimates that doubling MGD could raise an additional £275 million ($369.82 million) to £458 million ($615.93 million) from category B £2-a-spin slot machines, on top of the £600 million they currently pay.
Entain employs more than 28,000 people worldwide. The company is due to move from the FTSE 100 to the FTSE 250 on Sept. 21.