Evoke Explores Sale Options Following UK Budget Tax Increases
Evoke plc has announced a strategic review that could result in the sale of the company or its assets, as the owner of William Hill, 888, and Mr Green faces up to £135 million in annual duty cost increases following the UK government’s gambling tax reforms.
The Gibraltar-incorporated, London-headquartered gambling operator said its board of directors is undertaking a review of strategic options, “including but not limited to a potential sale of the group.” The company added that divesting certain business units or assets also remains under consideration.
Evoke has appointed Morgan Stanley & Co. International plc and Rothschild & Co as joint financial advisers to oversee the review process. The company cautioned shareholders that there is no certainty any transaction will occur or what terms might be involved.
Tax Increases Prompt Strategic Response
The strategic review follows the UK government’s autumn Budget announcement in November, when the Labour government unveiled plans to increase gambling taxes. The Chancellor raised remote gaming duty from 21% to 40% effective April 2026, and introduced a new online sports betting duty of 25% covering all sports except horse racing, beginning in 2027.
The debt-laden operator previously disclosed that changes to online gaming duties and the new sports betting tax would see its duty costs rise by up to £135 million annually from 2027.
Evoke expects to mitigate approximately half of the tax increase impact through store closures, potential changes to its customer proposition, supplier savings, and reduced marketing spend. The company has not specified how many retail locations will close, but indicated prior to the Budget that it could shut up to 200 sites if gambling taxes were raised.
Market Response and Share Performance
Shares in Evoke hit a record low on Monday, having declined 60% since the start of the year. The stock moved 10% higher on Wednesday following the strategic review announcement, as investors responded to the potential for a transaction.
The company operates internationally recognized gambling brands and maintains offices in multiple countries. Evoke describes itself as one of the world’s leading betting and gaming companies, with a vision to make life more interesting through world-class betting and gaming experiences.
Regulatory Context
The City Code on Takeovers and Mergers does not apply to Evoke as it is registered in Gibraltar. Any takeover offer for the company will not be regulated by the UK Panel on Takeovers and Mergers, though the company’s articles of association contain certain takeover-related provisions.
The strategic review announcement represents the latest development in the UK gambling industry’s response to increased regulatory and tax pressures. The sector has faced growing scrutiny over player protection measures and responsible gambling practices, alongside the government’s efforts to increase tax revenues from online gaming operations.
Source: Evoke plc
