Whether it wants to be or not, UK gambling is likely to be dragged into another battle over tax hikes as new leadership enters Westminster.
A familiar industry foe in the Social Market Foundation (SMF), fired the starting shots yesterday, in a clash that could serve to have a major impact on the retail sector.
The Betting and Gaming Council has rallied against the SMF after the think tank put forward the case for a tax increase on UK betting shops and specifically Fixed Odds Betting Terminals, which the SMF stated should double in their taxation rate from 20% to 40%.
According to The Betting and Gaming Council, which stated it ‘fundamentally opposes any increase in Machine Games Duty’, nothing in the report of the SMF justifies a policy that would cause significant damage to the retail sector.
The body emphasised the role of the retail sector in communities, a message that potentially resonated with the government in the lead-up to the Autumn Budget, as the retail sector was one of the few areas that didn’t feel the wrath of the government in terms of taxation hikes.
The BGC stated: “Bingo clubs, betting shops, casinos, working men’s clubs and miners’ welfare clubs play an important role in communities across the country. The regulated betting and gaming sector supports around 109,000 jobs, contributes billions to the UK economy and provides valued leisure venues for the millions of adults who enjoy betting safely and responsibly.”
It also warned that the impact could be significant for job losses in the country: “Doubling Machine Games Duty would not protect those communities. It would force venue closures, cost jobs and weaken high streets, while benefiting only the growing illegal gambling market, which pays no tax, contributes nothing to local communities and offers none of the consumer protections found in the regulated sector.
“Remarkably, the report makes no attempt to quantify the venue closures or job losses its own proposals would cause.
“Perhaps most strikingly, the report’s own polling shows that a majority of people, across the political spectrum, do not support increasing taxes on gaming machines. Tax policy should be evidence-led, proportionate and based on a full assessment of its impact on jobs, investment, consumers and communities.”
The law firm Regulus Partners also took to the airwaves to dispute the legitimacy of the claims put forward by the SMF, who in many ways depicted machine game duty as an easy win for the industry.
Given the significant chunk of revenue that is generated from machines, Regulus identified three choices that operators would be pushed into as a result of the plans put forward by the SMF.
• Absorb the tax increase and decrease profit
• Offset the tax increase with cuts to operating costs to maintain profit margins
(for example, by lowering executive pay or marketing)
• Pass tax increases on to consumers (for example, by altering the odds of
machines to effectively increase the price of gambling to consumers)
We await the governmental policy of Andy Burnham and what the UK’s fiscal approach will look like. But if early murmurings are to have any validity, he is unlikely to shy away from tax rises. And, we already know his stance is not one of favour towards the gambling industry and high street betting.
The BGC and UK gambling is going to have to be on the front foot in terms of warning of the consequences of such tax rises and what they would mean for the economy and jobs in the UK, if it is to avoid adding a dramatic blow to the high street gambling sector to its list of woes in 2026.
