Debt-laden William Hill UK owner Evoke explores sale after gambling tax hike

Wed, 10th Dec 2025 13:07

Evoke's shares rise over 10% after more than one-third drop since budget

Analyst says strategic review not a surprise

Listed peers unlikely to be potential buyers due to competition concerns -analyst

By Yadarisa Shabong and Raechel Thankam Job

Dec 10 (Reuters) - William Hill UK and 888 owner Evoke is reviewing strategic options including a potential sale of the company, just weeks after UK tax hikes on online gaming and sports betting forced it to withdraw its medium-term outlook. Shares of the company, which had lost more than 36% of their value since finance minister Rachel Reeves's budget last month, rose more than 10% on Wednesday. Evoke withdrew its medium-term targets, warning of a hit to profit and thousands of potential job cuts after Reeves increased taxes on online gaming such as casino games and slots to 40% from 21% and on sports betting to 25% from 15%.

UK-focused Evoke is likely to be more affected than its listed peers as the tax hikes could lead to a big increase in its already high leverage, analysts have warned. Net debt stood at 1.82 billion pounds ($2.42 billion) as of end-June, with a net debt to EBITDA ratio of 5.0 times, compared to 3.1x and 4x, respectively, for Entain and Flutter.

Berenberg analyst Jack Cummings said an outright sale could work, but a buyer would inherit Evoke's substantial debt. Entain and Flutter are unlikely buyers due to competition concerns, as all three have significant UK online businesses, he added.

CONSTRAINED BY CAPITAL STRUCTURE

Previously known as 888 Holdings, Evoke purchased William Hill's UK business from Caesars Entertainment in 2022, incurring significant debt, before changing its name last year.

"It's a business that actually has some good units but is constrained by the capital structure. A strategic review makes a lot of sense given the leverage," Cummings said.

Evoke's market capitalisation has fallen to about 98 million pounds from 2.22 billion pounds at its peak in 2021.

The firm has narrowed its focus to core markets UK, Italy, Spain, Denmark and Romania after tighter regulation and higher costs squeezed earnings.

Evoke has appointed Morgan Stanley and Rothschild as joint financial advisers for the review.