October 16, 2024 2 min read

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Flutter CEO Advises Moderation in Taxation as Tax Hikes Continue

The Flutter CEO referred to the Laffer curve – a theoretical relationship between the levels of taxation and tax revenue

Peter Jackson, Flutter Entertainment’s chief executive officer, believes that the ideal online sports betting tax rate would be 18%. In an interview with The Financial Times, he shared his tax-related opinions about the US wagering sector.

Flutter’s CEO Promotes a Golden Middle

Jackson’s proposed tax rate is noticeably higher than the tax rate of certain jurisdictions, including New Jersey. At the same time, it is significantly lower than the huge online gaming tax rates in states such as New York and Pennsylvania.

The Flutter CEO referred to the Laffer curve – a theoretical relationship between the levels of taxation and tax revenue. This concept states that low taxes cannot reach optimal tax revenue. At the same time, taxes that are too high disincentivize a functioning market and are harmful. The Laffer curve is based on the concept that tax rates of 0% and 100% would both generate no tax revenues.

This relationship therefore suggests that there is a golden middle when it comes to tax rates. For Jackson, this middle stands at around 18%.

He further added that high taxes hurt smaller businesses way more than they do large companies, limiting market competition. Since players are very sensitive to reductions in promotional spending, radical tax hikes will only channel more players toward the top operators or chase them away to sweepstakes operators or illegal sportsbooks.

Tax Hikes Are Becoming Common

Jackson’s comments come in the wake of tax hikes across several states. In 2023, Ohio doubled its betting tax to 20%. Earlier this year, Illinois implemented a new tax regime, under which bigger operators have to pay a higher tax. This change was criticized by the CEO, who warned that it could have adverse effects.

New Jersey has likewise been mulling over higher taxes, although no significant change has been implemented as of the time of this writing. At G2E Las Vegas industry experts confirmed that the Garden State is the most likely to raise its betting tax rate next.

Non-US markets have also been considering higher tax rates, prompting talks in the UK and France. The Netherlands, on the other hand, proceeded with a tax hike, despite industry representatives’ claims that this would be a “gift to the black market.”

Journalist

Although Fiona doesn't have a long-spanning background within the gambling industry, she is an incredibly skilled journalist who has built a strong interest in the constantly growing iGaming network. The team at GamblingNews.com is glad to have her on our roster to help deliver the best stories as soon as they hit. Aside from writing, she loves to dabble in online casino games such as slots and roulette, both for her own enjoyment and also as research to better improve her understanding of the industry.

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