The Ladbrokes owner, Entain, has said it is preparing to cut 400 jobs, only weeks after the FTSE 100 business reported better than expected profit in its first half of the year.
The gambling group, which also owns Coral and BetMGM, has started a consultation process that could remove one in five of its 2,000 customer care jobs.
Its chief executive, Stella David, said the proposed changes were made 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.”
It comes only weeks after the company revealed its underlying operating profit had hit £479m in the six months to the end of June – 2% below the same period in the year prior but ahead of what investors had expected.
Entain blamed the job cuts partly on higher taxes in the UK, as the sector also braces for a mooted increase to machine games duty in the budget.
The chancellor, John Healey, is reportedly looking at increasing the levy in his inaugural budget on 28 October, in a way that could target betting shops and adult gaming centres (AGCs).
AGCs, which offer 24-hour gambling machines, have grown rapidly across UK high streets in recent years, disproportionately targeting economically deprived areas.
While online casinos were hit with a tax increase in Rachel Reeves’s budget last year, duty on physical slot machines in AGCs were not affected.
Doubling machine games duty could increase the tax take from “category B” £2-a-spin slot machines by between £275m and £458m, on top of the £600m they currently pay, according to research by the Social Market Foundation thinktank.
David wrote to Andy Burnham last week, arguing that doubling the standard rate of machine games duty from 20% to 40% would add about £100m to the cost of running Entain’s retail business in the UK, and claiming that could result in 1,470 betting shop closures in the UK and 15,900 job losses.
Burnham has previously backed a proposal by Gordon Brown to pay for an end to the two-child benefit cap by tapping the gambling industry for more tax.
Entain, which is headquartered in London and employs more than 28,000 people worldwide, started as GVC Holdings in 2004 under Kenny Alexander. It has grown into one of the biggest betting businesses in the world, and includes brands such as BetCity and Eurobet as well as gaming brands Foxy Bingo, Gala and PartyCasino.
Shares in the company, which will be demoted to the mid-cap FTSE 250 index from 21 September, are down by about 36% in the year to date. They fell 1% in early trading on Wednesday.
