Sky Bet Heads to Malta: Why Flutter Is Moving Its UK Betting Giant

Sky Bet is set to move its operations to Malta, a move that could save parent company Flutter Entertainment up to £55 million in tax every year. The news, which was first reported in an ITV exclusive, comes at a highly controversial time – just days ahead of the UK’s Autumn Budget, which is predicted to hit the UK’s gambling industry significantly.

But this is no sudden withdrawal, not by any means. The move was actually first pitched in-house back in June, when Flutter Entertainment reps held a live stream meeting across the company’s UK and Irish brands. Sky Betting and Gaming, also known as Bonne Terre Limited, was headquartered in Leeds, West Yorkshire and had offices in Sheffield and Solihull in the UK. The popular bookie, Sky Bet, is going to be moved to Malta, where it will be managed under a new UK company, SBG Sports Limited.

Sky Bet Takes to Malta

We ran a quick check on the UKGC public register, and found that SBG Sports Limited is registered with the UKGC. Holding account number 67370, it has Sky Bet listed under its trading name. Therefore, Sky Bet is not going to leave the UK gambling industry – anyone with an account at Sky Bet can rest assured – this is not an exit or the start of the end for Sky Bet. The operator will continue to run in the UK under its UKGC licence, and there have been no announcements from Sky Bet that the products for consumers will change in any way.

The shift is structural, and not based on changing the product. Though for employees, of which there are an estimated 5,000+ in the UK, there could be potential layoffs or relocation. As per the breaking news on ITV about Sky Bet moving to Malta, it was reported that Flutter Entertainment PLC stated (back in June) that around 250 people would be made redundant in the UK. The relocation from the UK to Malta was needed to operate more efficiently and cut costs.

Who Are Flutter Entertainment PLC

The company may be more recognised in North America than the UK, but Flutter is one of the world’s largest gambling groups. Based in the US, the group operates in over 20 international markets and owns some of the most iconic mobile sports betting and online casino gaming brands in the world. Even if you never touched an online slot machine or have been inside a high street bookie before, you may recognise a few of these names:

• FanDuel
• PokerStars
• Paddy Power
• Betfair

And add Sky Bet to that list. While none of the brands appear on the front of EPL football shirts anymore, many of these brands sponsor major sports clubs, leagues, broadcasts and their gambling ads are seen by millions across the UK. Through FanDuel, Paddy Power and the rest, Flutter Entertainment competes with some of the biggest gambling firms in the UK and US, but the parent company’s influence does not stop there.

Recently, Flutter increased its foothold in Italy, where it owns Sisal, Snai, and Tombola, all licensed under the new Italian iGaming licensing framework. Flutter also runs the Adjarabet brand (Georgia), MaxBet (Serbia), Betnacional (Brazil), Sportsbet (Australia), and a number of solutions providers and sports data providers.

In the US, Flutter is constantly expanding on its flagship brand, FanDuel, and recently announced new P2P FanDuel fantasy products, in addition to the intention to expand FanDuel into prediction markets via a collaboration with CME Group.

Flutter and Gambling Regulations

Yet everything comes at a cost, and even the biggest groups are not immune to the consequences of tax hikes, especially when they are scaling their operations and expanding into new territory. Flutter has spent the last few years diversifying its operational footprint and has over 75 global offices with over 23,000 employees. Flutter actually holds iGaming licenses in 19 jurisdictions, including:

• Danish Gaming Authority
• UK Gambling Commission
• Isle of Man Gambling Supervision Commission
• Malta Gaming Authority

And just to be clear, moving Sky Bet from the UK to Malta doesn’t look like it will impact the UK customers, as Sky Bet still holds a UKGC licence.

Malta VS the UK for Gambling Operators

Because of the timing, just ahead of Rachel Reeves’ Autumn Budget, tabloids will pin the move to tax purposes. While, yes, Malta does have a potentially more lenient tax structure than the UK, there are other important aspects to consider about the Maltese regulation and infrastructure that could also be more beneficial.

Taxation

The UK’s taxation on gambling is split into numerous categories, and it is set to rise after the Autumn Budget is released. The corporate tax on gambling sits at 25%, and there is pressure on both the remote gaming duty and the machine gaming duty. It has actually caused quite the stir, with many high street bookies closing in the UK, and is worrying the British Horseracing Association, which staged a 1-day protest to tax hikes in September.

Malta actually has a higher corp tax, which is rated at 35%, but operators can reclaim a big portion of this through the Malta tax refund system. This can drive down the rate to around 5%. The report by ITV estimated that Flutter could save up to £55 million a year.

Cross Border Operations

Assuming Sky Bet holds onto its UKGC licence, many of the legislation and compliance standards will remain, but there are some areas that can be potentially impacted by moving to Malta. The administrative burden on non-UK markets will be lower, as Sky Bet’s Maltese entity can use the MGA licence to reach more countries outside the UK. Malta is quite a well-connected iGaming hub, with more partnerships, payment providers, B2B providers and specialist talents that Sky Bet can partner up with.

Operational Freedom

The overhead fees, such as new affordability checks, higher compliance demands, and rising taxes in the UK can surmount massive costs, which Flutter can mitigate by basing Sky Bet in Malta. The country’s ecosystem is also a lot faster for hiring, developing new tech, and making new partnerships, which Sky Bet can definitely benefit from.

But just to note, these differences only impact the way the business is run and Flutter’s corporate flexibility. Provided Sky Bet still operates under its UKGC licence, the player protection measures, betting products to UK consumers, and related legislation will still apply.

Will More UK Gambling Firms Join Sky Bet and Leave?

Sky Bet is the first big name bookmaker to shift its core operations outside the UK, and it may not be the only one. The UK government is preparing to raise billions in additional tax revenue from betting companies, targeting all the biggest operators. The system is already difficult for some of the smaller companies to keep up with, and those carrying thin profit margins may reassess their positions. Sky Bet could serve as an example, though we should also note, not all companies have the possibility to scale their operations or manage such a move as seamlessly as Flutter. Resources and connections are required, and it is not a move all can afford to make.

Shifting to UKGC whitelisted territories may be a more viable option for such operators. These include jurisdictions such as:

• The Isle of Man
• Gibraltar
• Antigua and Barbuda
• Alderney

Autumn Budget Woes and Deadline Approaching

The UK’s gambling market is valued at over £10 billion annually, and the Chancellor is under pressure to raise funds for the state. Naturally, betting companies like Sky Bet are worried, and there are plenty of rumours surrounding the upcoming Budget, which is scheduled for November 26. It will not only affect the betting industry, but also spending on public services, and taxation plans to boost the UK’s economy. Rumour has it that Reeves could be looking to introduce:

• Higher remote gaming duty
• Increased machine gaming duty
• Stricter affordability checks
• A potential new levy on “high-risk” gambling products

The UK still represents one of the biggest gambling markets in the world, and operators rarely leave this market. But there may be more examples, like SkyBet, of brands relocating departments, leadership teams or entire licence operations abroad to avoid the financial implications. Some analysts reckon there may be a partial exodus among the digital-first brands, who don’t have physical high street betting shops and are in a better situation to take their base of operations outside the UK.

Sky Bet’s move to Malta, right now, looks to be a savvy move that can keep it running in the UK and strengthen the operator’s international presence. Service is expected to continue for UK consumers with no immediate changes, and if the move pays off, it could be the start of a broader industry trend.