Key facts
- Betfred plans to cut 600 jobs and close 132 of its betting shops.
- The company's co-founder and chairman, Fred Done, warned that all 1,287 shops could shut if gambling taxes rise.
- A significant tax increase could result in the loss of approximately 7,500 jobs.
- The potential tax hike is being considered by Chancellor Rachel Reeves to address public finance shortfalls.
- The gambling industry argues that higher taxes would negatively impact profits and potentially drive customers to offshore betting sites.
Betfred is planning to cut 600 jobs and close 132 of its high street betting shops, citing fears of a significant tax increase on the gambling industry. The company's co-founder and chairman, Fred Done, warned that such a tax hike could force the closure of all 1,287 Betfred shops across the UK, potentially leading to the loss of 7,500 jobs.
Chancellor Rachel Reeves is reportedly considering raising taxes on gambling firms, with suggestions ranging from increasing duties on sports betting from 15% to 30% and on online slots from 20% to 50%. The Institute for Public Policy Research (IPPR) estimates that these increases could generate an additional £3.2 billion, which former Prime Minister Gordon Brown has suggested could be used to alleviate child poverty.
However, the gambling industry is pushing back against these proposals. The Betting and Gaming Council has labeled the idea as "economically reckless," arguing it would drive gamblers to the black market. Betfred's Mr. Done stated that if taxes rose to 35% or 40%, there would be no profit left in the business, necessitating closures. He also noted that 300 of his shops are already losing money, and a 5% tax increase would push that number higher.
Betfred's recent annual results show nearly £1 billion in revenue but an operating profit of only £500,000. The company, which is family-owned with bases in the UK, Gibraltar, the US, and South Africa, has also faced increased costs from rising employer National Insurance Contributions and minimum wage hikes, adding £20 million to its expenses. Mr. Done acknowledged the ongoing shift towards online gambling but suggested that, without tax increases, high street betting shops could still have around 20 years of life.
Rival firms are also facing similar pressures. William Hill has indicated it might close up to 200 shops, affecting around 1,500 jobs. Entain, the owner of Ladbrokes and Coral, has also warned that higher taxes could lead to shop closures and investment diversion. Paddy Power recently announced the closure of 57 shops in the UK and Republic of Ireland due to rising costs and challenging market conditions.