Key facts
- A proposed increase in gambling tax, specifically machine games duty (MGD), is facing scrutiny.
- The Social Market Foundation suggests MGD could rise from 20% to 40%, potentially raising £275m-£460m annually.
- Industry lobby group the Betting and Gaming Council estimates up to 1,470 betting shops could close and 15,900 jobs lost under a 40% duty.
- Betfred's owner, Fred Done, claims he would close nearly half of his shops, costing £67m in taxes.
- Rank Group warned that a third of its venues, affecting 2,000 staff, could close.
Questions have emerged over the evidence behind a proposed 458 million pound gambling tax rise, with Chancellor John Healey reportedly considering increasing taxes on high-street slot machines. The influential Social Market Foundation thinktank advocates for raising machine games duty (MGD) from 20% to 40%, estimating it could generate between 275 million and 460 million pounds annually. This proposal is likely to find sympathy with Andy Burnham, who has been a vocal critic of slot machines and has already tightened licensing laws.
However, industry figures are divided. Fred Done, owner of Betfred, is among those who claim such a policy would force shop closures, cost jobs, and ultimately deprive the Treasury of taxes. He stated he alone would close about 495 betting shops, leading to 2,475 job losses and 67 million pounds in lost taxes. Entain, owner of Ladbrokes and Coral, has also warned of job cuts across its 2,300 shops. Casinos and bingo halls are also at risk, with Rank Group cautioning that a third of its venues could close, affecting 2,000 staff.
Critics, such as Stewart Kenny, co-founder of Paddy Power, have accused industry bosses of "scaremongering." A report commissioned by the Betting and Gaming Council from EY estimated that a duty rise to 40% could close up to 1,470 betting shops, resulting in 15,900 job losses and a net loss to the exchequer of about 120 million pounds. The report also noted a potential hit to horse racing, which receives a levy from bookies' profits.
Past threats from companies like Betfred to close shops in response to regulation or taxes have not always materialized to the extent predicted, with some suggesting that broader shifts to online gambling and corporate cost-cutting play a role. Bet365, which operates online, cited increased gambling duties as a reason for job cuts, though some staff believe it is a smokescreen for cost-cutting. Nevertheless, experts acknowledge that any further increase in costs would likely negatively affect the gambling sector, and fear of the tax is already impacting investment, according to Simon Thomas, CEO of the Hippodrome Casino.