Flutter Entertainment plcFLUT
Flutter Entertainment plc Income Taxes Disclosure
INCOME TAXES
Income (loss) before income taxes for the years ended December 31, 2025, 2024 and 2023 consists of the following:
| Year ended December 31, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Ireland | $ | (333) | $ | (292) | $ | 144 | |||||||||||
| United States | 311 | 115 | (264) | ||||||||||||||
| Other countries | (99) | 193 | (971) | ||||||||||||||
| Income (loss) before income taxes | $ | (121) | $ | 16 | $ | (1,091) | |||||||||||
The components of income tax expense, excluding amounts allocated to other comprehensive (loss) income, for the year ended December 31, 2025, 2024 and 2023 consists of the following:
| Year ended December 31, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Current: | |||||||||||||||||
| Ireland | $ | 15 | $ | 7 | $ | 44 | |||||||||||
| U.S. federal | 1 | (3) | (1) | ||||||||||||||
| U.S. state | 23 | 4 | 6 | ||||||||||||||
| Other countries | 392 | 194 | 203 | ||||||||||||||
| Total current tax expense | 431 | 202 | 252 | ||||||||||||||
| Deferred: | |||||||||||||||||
| Ireland | $ | 11 | $ | 2 | $ | 1 | |||||||||||
| U.S. federal | 42 | (200) | — | ||||||||||||||
| U.S. state | (46) | (47) | — | ||||||||||||||
| Other countries | (152) | (103) | (133) | ||||||||||||||
| Total deferred tax (benefit) | (145) | (348) | (132) | ||||||||||||||
| Total income tax expense (benefit): | |||||||||||||||||
| Ireland | $ | 26 | $ | 9 | $ | 45 | |||||||||||
| U.S. federal | 43 | (203) | (1) | ||||||||||||||
| U.S. state | (23) | (43) | 6 | ||||||||||||||
| Other countries | 240 | 91 | 70 | ||||||||||||||
| Total income tax (benefit) expense | $ | 286 | $ | (146) | $ | 120 | |||||||||||
The Group recognized an income tax benefit of $9 million in other comprehensive income for the year ended December 31, 2025. There is no income tax (benefit) expense in other comprehensive income for the years ended December 31, 2024 and 2023.
As further described in Note 2, Summary of Significant Accounting Policies, the Group has elected to prospectively adopt the guidance in ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Taxes Disclosures, (ASU 2023-09). The following table is a reconciliation between the Irish statutory income tax rate, the trading income tax rate of our country of domicile, and our actual effective tax rate for the year ended December 31, 2025 in accordance with the guidance in ASU 2023-09:
| Year ended December 31, | ||||||||||||||
| ($ in millions) | 2025 | |||||||||||||
| Loss before income taxes | (121) | |||||||||||||
| Irish corporation trading tax at a 12.5% rate | (15) | 12.5 | % | |||||||||||
| Ireland Tax Effects | ||||||||||||||
| Effect of cross-border tax laws | ||||||||||||||
| Pillar two taxes - income inclusion rule | 4 | (3.3) | % | |||||||||||
| Tax Credits | ||||||||||||||
| Foreign tax credits on withholding taxes | (13) | 10.7 | % | |||||||||||
| Nontaxable or nondeductible items | ||||||||||||||
| Nontaxable movements on Fox Option Liability | (37) | 30.6 | % | |||||||||||
| Interest expense | 13 | (10.7) | % | |||||||||||
| Change in valuation allowance | 54 | (44.6) | % | |||||||||||
| Other reconciling items | ||||||||||||||
| Effects of internal reorganization | 18 | (14.9) | % | |||||||||||
| Other | 12 | (9.9) | % | |||||||||||
| Foreign Tax Effects | ||||||||||||||
| United States | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | 27 | (22.3) | % | |||||||||||
| State and local income taxes | (19) | 15.7 | % | |||||||||||
| Effects of internal reorganization | 65 | (53.7) | % | |||||||||||
| Change in valuation allowance | (91) | 75.2 | % | |||||||||||
| Withholding taxes | 17 | (14.0) | % | |||||||||||
| Excess tax benefits on share-based compensation | (10) | 8.3 | % | |||||||||||
| Research and development tax credits | (19) | 15.7 | % | |||||||||||
| Under (over) provision in previous year | 12 | (9.9) | % | |||||||||||
| Other | 20 | (16.5) | % | |||||||||||
| United Kingdom | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | (12) | 9.9 | % | |||||||||||
| Foreign tax credit | (8) | 6.6 | % | |||||||||||
| Excess tax benefits on share-based compensation | (6) | 5.0 | % | |||||||||||
| Nontaxable foreign exchange loss | 28 | (23.1) | % | |||||||||||
| Effects of internal reorganization | 8 | (6.6) | % | |||||||||||
| Under (over) provision in previous years | 11 | (9.1) | % | |||||||||||
| Other | (2) | 1.7 | % | |||||||||||
| Italy | ||||||||||||||
| Taxation of Italian subsidiary earnings | 6 | (5.0) | % | |||||||||||
| Withholding taxes | 5 | (4.1) | % | |||||||||||
| Effects of internal reorganization | 81 | (66.9) | % | |||||||||||
| Under (over) provision in previous years | (10) | 8.3 | % | |||||||||||
| Change in valuation allowance | (8) | 6.6 | % | |||||||||||
| Other | 2 | (1.7) | % | |||||||||||
| Australia | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | 17 | (14.0) | % | |||||||||||
| Withholding taxes | 12 | (9.9) | % | |||||||||||
| Other | 4 | (3.3) | % | |||||||||||
| Netherlands | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | 27 | (22.3) | % | |||||||||||
| Other | (8) | 6.6 | % | |||||||||||
| India | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | (67) | 55.4 | % | |||||||||||
| Nondeductible goodwill impairment | 131 | (108.9) | % | |||||||||||
| Other | 2 | (1.7) | % | |||||||||||
| Brazil | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | (33) | 27.3 | % | |||||||||||
| Withholding taxes | 15 | (12.4) | % | |||||||||||
| Change in valuation allowance | 13 | (10.7) | % | |||||||||||
| Malta | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | (7) | 5.8 | % | |||||||||||
| Other | (1) | 0.8 | % | |||||||||||
| Gibraltar | ||||||||||||||
| Effect of internal reorganization | (9) | 7.4 | % | |||||||||||
| Other | 7 | (5.8) | % | |||||||||||
| Türkiye | ||||||||||||||
| Effect of different statutory rates in overseas jurisdictions | 13 | (10.7) | % | |||||||||||
| Withholding taxes | 4 | (3.3) | % | |||||||||||
| Other foreign jurisdictions | 16 | (13.2) | % | |||||||||||
| Worldwide changes in unrecognized tax benefits | 17 | (14.0) | % | |||||||||||
| Actual effective tax rate | $ | 286 | (236.4) | % | ||||||||||
The following table is a reconciliation between the Irish statutory income tax rate, the trading income tax rate of our country of domicile, and our actual effective tax rate for the years ended December 31, 2024 and 2023 in accordance with the guidance prior to the adoption of ASU 2023-09:
| Year ended December 31, | |||||||||||
| 2024 | 2023 | ||||||||||
Irish corporation trading tax rate of | 12.5 | % | (12.5) | % | |||||||
| Depreciation on non-qualifying property and equipment | 8.9 | % | 0.1 | % | |||||||
| Effect of different statutory income tax rates in foreign jurisdictions | 226.0 | % | 4.7 | % | |||||||
| Non-deductible expenses | 230.5 | % | 1.5 | % | |||||||
| Non-deductible expenses (non-taxable) Fox option expense (income) | 606.1 | % | 3.6 | % | |||||||
| Non-taxable income | (219.9) | % | (1.6) | % | |||||||
| Effect of changes in statutory income tax rates | 1.7 | % | 0.1 | % | |||||||
| Change in valuation allowance | (1444.5 | %) | 12.1 | % | |||||||
| Under (over) provision in prior year | (333.8 | %) | 3.0 | % | |||||||
| Actual effective tax rate | (912.5) | % | 11.0 | % | |||||||
The Group’s effective tax rate for the year ended December 31, 2025 was materially impacted by (i) the change in the valuation allowance primarily related to one of the Group's U.S. tax paying component's release of U.S. federal and state valuation allowance of $97 million and $42 million, respectively; (ii) the nondeductible goodwill impairment of $517 million related to Junglee; (iii) the PokerStars internal reorganization whereby the Group reallocated the PokerStars intangible assets resulting in a $153 million tax expense, primarily related to the U.S. and Italy, and (iv) the effect of the $300 million fair value gain on the Fox Option Liability which is not subject to taxation.
The Group’s effective tax rate for the year ended December 31, 2024 was materially impacted by (i) the change in valuation allowance of $178 million, primarily related to the release in U.S. federal and state valuation allowance; (ii) favorable changes in provision to return adjustments; and (iii) the effect of expenses which are not deductible for income tax purposes.
The Group’s effective tax rate for the year ended December 31, 2023, was materially impacted by (i) change in valuation allowance of $133 million from our assessment of the future recoverability of deferred tax assets primarily in the U.S. and Netherlands; and (ii) the effect of expenses which are not deductible for income tax purposes.
For the years ended December 31, 2025 and December 31, 2024 the Group incurred insignificant income tax expense in connection with Pillar Two. Under US GAAP, the Model GloBE Rules for Pillar Two are considered an alternative minimum tax and therefore deferred taxes were not recognized or adjusted for the estimated effects of the minimum tax.
The information below summarizes the income tax paid (net of refunds) for the year ended December 31, 2025 in accordance with ASU 2023-09:
| Year ended December 31, | |||||
| 2025 | |||||
| ($ in millions) | |||||
| Ireland | 7 | ||||
| U.S. federal | 65 | ||||
| United Kingdom | 41 | ||||
| Australia | 53 | ||||
Italy national1 | 140 | ||||
| Other countries | 139 | ||||
| Total Foreign | 438 | ||||
| Total | $ | 445 | |||
1.Includes $60 million of income tax payments related to income tax liabilities assumed as part of the acquisition of Snai.
The components of deferred tax assets (liabilities) were as follows as of December 31, 2025 and 2024:
| As of December 31, | |||||||||||
| ($ in millions) | 2025 | 2024 | |||||||||
| Deferred tax assets | |||||||||||
| Property and equipment | $ | 24 | $ | 39 | |||||||
| Irish deferred amortization deductions | 238 | 65 | |||||||||
| Share-based compensation | 56 | 44 | |||||||||
| Net operating loss carryforwards | 620 | 850 | |||||||||
| Operating lease liabilities | 72 | 39 | |||||||||
| Interest limitation carryforwards | 98 | 75 | |||||||||
| Other | 113 | 158 | |||||||||
| Total deferred tax assets | 1,221 | 1,270 | |||||||||
| Valuation allowance | (770) | (878) | |||||||||
| Total deferred tax assets, net of valuation allowance | 451 | 392 | |||||||||
| Deferred tax liabilities | |||||||||||
| Operating lease right-of-use assets | (61) | (46) | |||||||||
| Intangible assets | (1,186) | (684) | |||||||||
| Total deferred tax liabilities | (1,247) | (730) | |||||||||
| Net deferred tax liabilities | $ | (796) | $ | (338) | |||||||
Deferred tax assets and liabilities have been offset at December 31, 2025 and 2024 to the extent they relate to the same tax-paying component. Included in the Consolidated Balance Sheets is a deferred tax asset of $309 million (December 31, 2024: $267 million) and a deferred tax liability of $1,105 million (December 31, 2024: $605 million).
The movement in the valuation allowance balance differs from the amount in the effective rate reconciliation due to adjustments affecting other comprehensive income and translation adjustments, as summarized below.
The deferred tax liability in relation to intangible assets disclosed above primarily relates to acquisition accounting-related intangibles. This deferred tax liability will unwind as the intangible assets are amortized over their useful economic life.
The deferred tax asset arising on share-based compensation relates to future tax deductions the Group expects to receive in relation to share-based payment plans operated by the Group to reward its employees. The asset is measured at the tax rate expected to apply when the temporary difference reverses.
The movement in the valuation allowance was comprised of the following for the years ended December 31, 2025, 2024 and 2023:
| Year ended December 31, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Balance beginning of year | $ | 878 | $ | 1,067 | $ | 1,069 | |||||||||||
| Increase recognized in income tax expense | 182 | 80 | 172 | ||||||||||||||
| Decrease recognized in income tax expense | (144) | (306) | (39) | ||||||||||||||
| Foreign currency translation adjustments | 61 | (11) | (56) | ||||||||||||||
| Adjustment in relation to prior years | (225) | 48 | — | ||||||||||||||
| Written off deferred tax assets | — | — | (79) | ||||||||||||||
| Movement recognized in other comprehensive income | 18 | — | — | ||||||||||||||
| Net change in the valuation allowance | (108) | (189) | (2) | ||||||||||||||
| Balance end of year | $ | 770 | $ | 878 | $ | 1,067 | |||||||||||
For the year ended December 31, 2025, the Group recorded a net valuation allowance reduction, excluding foreign currency translation adjustments and movement recognized in other comprehensive income, of $187 million, comprising a valuation allowance release of $144 million primarily related to U.S. federal and state deferred tax assets of $139 million which is offset by an increase in valuation allowance due to current year operating losses in various jurisdictions and prior year adjustments, primarily related to one of our Dutch tax-paying components which has nil tax impact since it had a full valuation allowance as of fiscal 2024.
The Group evaluates the realizability of its deferred tax assets each reporting period and establishes a valuation allowance to reduce deferred tax assets to the amount that is more-likely-than-not to be realized. The Group considers all available positive and negative evidence, including historical operating losses, future reversals of existing taxable temporary differences and tax planning strategies when evaluating the need for a valuation. As of December 31, 2025, the Group determined that there is sufficient positive evidence to conclude that it is more-likely-than-not that U.S. federal and state deferred tax assets of $97 million and $42 million, respectively, are realizable as a result of an internal reorganization. The Group therefore reduced the valuation allowance by $139 million accordingly.
The Group has net operating loss carryforwards of $2,461 million as of December 31, 2025. Of these, $29 million expire between 2026 and 2033, $209 million expire between 2034 and 2046 and $2,223 million carry forward indefinitely. The Group has interest expense carryforwards of $389 million as of December 31, 2025, which carryforward indefinitely.
A valuation allowance has been recorded against deferred tax assets of $770 million (December 31, 2024: $878 million). This is on the basis that there is insufficient certainty of there being future taxable profits in the relevant jurisdictions and therefore the assets will be realizable. The timing of recognition is a key area of judgement in the current period.
During the year ended December 31, 2023, the Group has written off deferred tax assets of $79 million relating to net operating loss carryforward. A full valuation allowance was previously recorded in relation to the deferred tax asset for these net operating loss carryforwards and therefore there was no net effect of this within the income tax expenses for the year.
As of December 31, 2025, foreign earnings of $192 million have been retained by the Group’s foreign subsidiaries that meet the indefinite reinvestment reversal criteria and for which the related deferred tax liability has not been recognized. Upon repatriation of those earnings, in the form of dividends or otherwise, the Group could be subject to withholding taxes payable to various foreign countries of $11 million.
The following table presents a reconciliation of the total amounts of unrecognized tax benefits, excluding interest and penalties:
| As of December 31, | |||||||||||||||||
| ($ in millions) | 2025 | 2024 | 2023 | ||||||||||||||
| Unrecognized tax benefits at beginning of the year | $ | 153 | $ | 129 | $ | 237 | |||||||||||
| Increases for tax positions of prior years | 25 | 36 | 9 | ||||||||||||||
| Decreases for tax positions of prior years | — | (2) | (131) | ||||||||||||||
| Increases for tax positions of the current year | — | 5 | 6 | ||||||||||||||
| Reductions to unrecognized tax benefits as a result of a lapse of the applicable statute of limitations | (12) | (8) | (3) | ||||||||||||||
| Settlements | (31) | (5) | — | ||||||||||||||
| Foreign currency translation adjustments | 12 | (2) | 11 | ||||||||||||||
| Unrecognized tax benefits at the end of the year | $ | 147 | $ | 153 | $ | 129 | |||||||||||
As previously reported, we have received a discovery assessment from His Majesty’s Revenue and Customs authority (“HMRC”) relating to an intragroup transfer of intellectual property from the United Kingdom to the United States for the period ended December 31, 2020. As of December 31, 2025, we are in the process of appealing this assessment and previously recorded an unrecognized tax benefit for the estimated settlement which is included in the Group's Other non-current liabilities in the Consolidated Balance Sheet as well as the above unrecognized tax benefits table. We do not expect to resolve this matter in the near term and will continue to reassess the recognition and measurement criteria of the tax position. While the Group believes that we have strong arguments, there can be no assurance this matter will be resolved favorably.
We recognize interest and penalties related to income taxes, if applicable, as income tax expense. The total amounts of interest and penalties recognized in the Consolidated Statements of Comprehensive Income (Loss) were $4 million (year ended December 31, 2024: $5 million; year ended December 31, 2023: $5 million). The total amounts of interest and penalties recognized in the Consolidated Balance Sheets were $14 million (year ended December 31, 2024: $10 million).
The total amount of unrecognized tax benefits that, if recognized, would affect the effective tax rate are $147 million.
In addition to filing federal and national income tax returns, the Group files income tax returns in numerous states and other subnational jurisdictions that impose an income tax. The Group is no longer subject to Irish taxing authority examination for years prior to 2021. Income tax years for 2022 onwards remain subject to examination by the U.S. federal Internal Revenue Service. Earlier periods will remain subject to examination by the Internal Revenue Service as the net operating losses from those years are utilized.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 26, 2026 | Showing above |
| 2024 | Mar 4, 2025 | |
About Income Taxes Disclosures
The income tax disclosure reveals how much a company actually pays in taxes versus what the statutory rate would predict. Analysts focus on the effective tax rate (ETR) reconciliation, which breaks down every item driving the gap between the 21% federal rate and the company's reported ETR — including R&D credits, foreign rate differentials, and state taxes. Deferred tax assets (DTAs) and their valuation allowances signal management's confidence in future profitability: a rising allowance suggests the company doubts it can use accumulated tax benefits. Uncertain tax benefit (UTB) reserves quantify exposure to IRS challenges on aggressive positions.
Key signals to watch: sudden ETR drops without clear operational reasons, large increases in valuation allowances, growing UTB balances, and significant unremitted foreign earnings. Post-TCJA, pay attention to GILTI and BEAT provisions that affect multinational tax structures. Compare the cash taxes paid (from the cash flow statement) against the income tax provision to gauge earnings quality.