Key Moments:
- Evoke PLC has launched a strategic review. The process may lead to a full or partial sale as UK gambling taxes rise sharply.
- The new UK tax regime will increase Evoke’s annual duty costs by £125m–£135m once fully implemented. About £80m will hit the company in 2026.
- Evoke still carries heavy debt from its £2.2bn purchase of William Hill’s non-US business. Net debt will reach about £1.8bn by the end of 2024.
Strategic Options on the Table
Evoke PLC, the parent of William Hill, is reviewing major strategic options. The company faces a difficult period shaped by market pressure and steep UK tax hikes. The board hired Morgan Stanley and Rothschild to explore possible actions. These include a full sale or selling specific business units to increase shareholder value. The announcement lifted Evoke’s share price by 8%. Shares had previously dropped about 70% after the government proposed higher gambling duties.
Impact of New Tax Rules
The latest UK Budget from Chancellor Rachel Reeves introduced major tax changes for the sector. Remote gaming duty for online casino and slots will rise from 21% to 40% in April 2026. A new 25% duty on online sports betting will follow in April 2027, except for horse racing.
These changes will hit Evoke’s UK brands hard. William Hill and 888 will take most of the impact. Evoke expects annual duty costs to increase by £125m–£135m once the rules take full effect. Around £80m will affect results in 2026.
Evoke responded by withdrawing its earlier financial targets. The company says it must reassess its UK investments, marketing spend, and workforce levels. It has already begun to cut local spending and reduce headcount.
The Office for Budget Responsibility expects the entire industry to generate an extra £1.1bn in tax revenue by 2029–30. The OBR also warns that high taxes may push more consumers toward unregulated markets.
Legacy Debt and Market Challenges
The rising tax burden adds pressure to Evoke’s existing debt. The firm acquired William Hill’s non-US assets in 2022 for £2.2bn. The deal used more than £1bn in new shares and about £900m in fresh borrowing. Evoke expects to report around £1.8bn in net debt at the end of 2024. This equals more than five times its underlying EBITDA.
Since the acquisition, the company has struggled to meet its deleveraging goals. UK and EU regulations became stricter. Evoke exited or scaled back operations in several “dot-com” markets. It also sold its US consumer business and dealt with regulatory reviews tied to older compliance issues.
Its share performance reflects these obstacles. Evoke left the FTSE 250 in 2023. The company later revealed that it rejected a £700m takeover offer from Playtech. The deal valued shares at 156p, well above recent trading levels.
Uncertain Future as Review Attracts Interest
Chief Executive Per Widerström said the strategic review began because of a “materially changed fiscal environment.” He stressed that it does not reflect concerns about the company’s long-term prospects. Evoke said all options remain open. These include a full sale, new strategic investments, or asset sales such as William Hill’s retail network or its international online businesses. Still, the company warned that it cannot guarantee a final transaction.
Analysts say any bidder must handle the tax outlook and the company’s heavy debt. Possible acquirers include public gaming operators seeking a stronger UK presence. Private-equity firms may also show interest, especially those targeting undervalued digital assets. Land-based operators may pursue William Hill’s retail footprint.
One London-based analyst called Evoke “a strong franchise caught on the wrong side of regulation and leverage.” He added that the review may also pressure creditors and policymakers to consider the consequences of the current tax structure.
Financial Overview
| Key Metric | Details |
|---|---|
| Expected Additional Duty Costs (Annualized) | £125m – £135m |
| Duty Costs in 2026 | £80m |
| Net Debt at End of 2024 | £1.8bn |
| William Hill Acquisition Value (2022) | £2.2bn |
| Rejected Playtech Offer | £700m (156p per share) |
| OBR Forecasted Extra Sector Tax Revenue by 2029–30 | £1.1bn |
- Author
Daniel Williams
