Sky Bet relocates headquarters to Malta to slash its UK tax bill by as much as £55m a year | ITV News
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At no stage were staff told the move was intended to reduce Sky Bet’s tax bill, as Business and Economics Editor Joel Hills reports
One of the UK’s largest gambling firms, Sky Bet, has relocated its headquarters to Malta – in a move that could cut its UK tax bill by tens of millions of pounds a year.
The change will mean less money for the government at a time when the public finances are under strain.
The chancellor needs to increase tax revenues and is under pressure to levy higher duties on the betting industry – something the industry is aggressively campaigning against. Sky Bet, which describes itself as “the UK’s No. 1 betting app,” has moved its sportsbetting business to the Maltese branch of a new UK company, SBG Sports Limited.
Flutter Entertainment PLC, Sky Bet’s parent company, first told staff about the move in June, alongside a plan to make around 250 people in the UK redundant. At a meeting which was live-streamed across Flutter’s “UK and Ireland” business, workers in Leeds, Sunderland, London, Dublin, Gibraltar, Porto and Cluj were told the relocation of Sky Bet to Malta was driven by a “need to operate more efficiently” and to reduce costs.
Steve Birch, chief commercial officer of Sky Betting and Gaming, explained that from November 1, “day-to-day commercial and marketing decision making will take place in Malta,” although Sky Bet’s Leeds office would continue to be one of Flutter’s largest.
At no stage were staff told the move was intended to reduce Sky Bet’s tax bill, but an insider at Flutter told ITV News: “Tax was the elephant in the room. It is absolutely understood, across everyone affected, indirectly or directly, or even aware of the announcement, that this is about tax. No one with a straight face would say it’s ‘for strategic reasons’ or whatever other nonsense people come up with.”
According to Dan Neidle, a tax expert ITV News has worked with, a company based in Malta for tax purposes can pay an effective corporation tax rate of as little as 5% compared with 25% in the UK. Based on Sky Bet’s profits last year – filed at Companies House by Hestview Limited – that’s a potential saving of up to £31 million.
Neidle believes there is also a VAT loophole Flutter could exploit, which would have reduced the VAT Sky Bet paid on its marketing budget last year by as much as £24 million.
“I know lots of people who’ve gone to Malta. They’ve all either gone there for sunbathing or to avoid tax. I don’t know anyone who’s gone there for any other reason,” he told ITV News.
But Neidle, who used to be head of tax at Clifford Chance, says Sky Bet is taking a big risk.
“If I had been advising them, I’d say that it was reckless. The risk is that there’s a lot of expense in moving people to Malta, and then they’re stuck. And if the law changes [or] HMRC challenges their position, they could end up, in fact, saving nothing, but being stuck in Malta.”
Sky Bet are the main sponsor of the English Football League. Credit: PA
In 2024, Sky Bet spent £135 million on marketing, with Sky, ITV and YouTube being significant suppliers. Sky Bet is the main sponsor of the Sky Bet English Football League (EFL).
Sky Bet was originally set up as part of Sky. Flutter acquired the business in 2018 and continues to operate the brand under licence.
Flutter recently shifted its primary stock market listing to New York but has retained a secondary listing in London.
The company calls itself “the world’s largest sports betting and iGaming operator” and is valued at around £30 billion.
Flutter’s UK betting brands include Paddy Power and Betfair – both registered in Ireland and Malta – and Tombola, which has offices in Sunderland but is also registered in Gibraltar. Flutter moved the head office of Sky Gaming, which includes online slots and casino brands such as Sky Vegas and Sky Poker, to Gibraltar in 2024.
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Sky Bet’s Leeds office sits on the edge of the chancellor’s parliamentary constituency of Leeds West and Pudsey.
Rachel Reeves is under pressure to raise taxes on gambling firms in her Budget – not least from her backbench MPs.
The Institute for Public Policy Research (IPPR) estimates that the government could raise an extra £3.2 billion a year by increasing taxes on online gambling, physical slot machines, and sports betting.
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Former prime minister Gordon Brown has backed the proposal, saying the money should be used to lift the cap on benefits for families with more than two children.
The betting industry has warned that higher taxes would lead to shop closures, the loss of up to 40,000 jobs and wouldn’t raise anything like the sums Gordon Brown assumes.
Peter Jackson, the chief executive of Flutter, has taken part in that campaign. Earlier this month, he warned in The Sun newspaper that higher taxes would drive punters into the arms of black market operators. Last week, in a call with investors, he said the company “expect[s] decisions [in the Budget] to be based on economic merit, taking into account the industry’s substantial contribution to UK tax revenues and employment.”
The Chair of the Treasury Select Committee described Flutter’s decision to move Sky Bet’s HQ to Malta as “rather hypocritical.”
MPs are watching closely. The Treasury Select Committee summoned the Betting and Gaming Council – the industry lobby group – to answer questions about tax ahead of the budget. The chair of that committee described Flutter’s decision to move Sky Bet’s HQ to Malta as “rather hypocritical”.
“I’m pretty astounded,” MP Meg Hillier told ITV News. “The betting industry appeared in front of the Treasury Select Committee just a couple of weeks ago, extolling the virtues about how much tax they’re paying in the UK. And here we see a company going and offshoring. It rather takes the biscuit doesn’t it?”
In a statement to ITV News, a Flutter UKI spokesperson said: “Flutter paid more than £700 million in taxes to HMRC last year and we employ over 5,000 people across the UK, including almost 2,000 in Leeds and 600 in Sunderland.”
“As with most global businesses around the world, we are constantly striving to remain competitive and efficient and to give ourselves the best chance of success in an incredibly challenging environment.”
Flutter says the decision to relocate Sky Bet’s headquarters to Malta “will have some tax implications,” and it hasn’t challenged Dan Neidle’s calculation that the annual savings could be as much as £55 million.
The company says government policy is partly to blame, citing the extra costs of complying with the recent Gambling Act Review and “the possibility of tax rises in the Budget”, as well as an increase in betting with unlicenced online operators.
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