A Social Market Foundation (SMF) proposal to double the Machine Games Duty on Category B machines has clearly raised alarm bells within the industry, with warnings ringing loudly over the consequences of the move.
Bacta was damming in its indictment of the proposals to raise tax on machines from 20% to 40%, describing it as a plan to close venues rather than a plan to raise funds for the economy.
At this stage, it feels like the lobbying is in its early days, but the industry could be forgiven for having seen this script before; when this narrative begins to unravel, it rarely comes out unscathed.
Grainne Hurst, Chief Executive of the Betting and Gaming Council, has also laid out the impact on jobs, stating the job losses as a result of tax hikes would be significant and high streets would be weakened as a result.
These warnings aren’t unfounded from the industry; we know that high street betting had to recalibrate in 2019 when the stakes of Fixed Odds Betting Terminals were slashed to £2. It meant shops declined and operators had to fundamentally rethink how they did things on a retail level.
A change of this level, but on a wider scale, was thrust upon the industry last year when the taxation hikes hit. I believe the government, despite inflicting major damage to the industry, did make a facile effort to protect retail in this budget, for it to disregard even this now would be a major betrayal to the betting sector and Britain’s high streets.
Furthermore, Bacta emphasised its belief that the plan wouldn’t only have an impact on high street betting, but also in seaside towns, social clubs, piers, family entertainment centres, bingo premises, and throughout the supply chain of manufacturers, machine suppliers and small businesses that depend on this sector.
The body stated that the proposal of the SMF has fundamentally misunderstood how land-based venues operate, describing the idea that the sector can just afford to absorb another hit amidst rising costs across the board as ‘fantasy economics’.
It also claimed: “The SMF appears to have tried to separate Category B and Category C machines to avoid opposition from pubs and hospitality. That may be politically convenient, but it is economically incoherent. You cannot carve up the land-based sector on a spreadsheet and pretend there will be no wider consequences.”
The BGC criticised the report for assuming that spending displaced from betting shops, bingo clubs and casinos would simply be redirected elsewhere in the local economy, without modelling the likely closure of venues or assessing the wider economic and social consequences for affected communities.
The trade body said any future consideration of Machine Games Duty should be based on a full assessment of the different land-based venues affected, the consumer protections they provide, their contribution to jobs and local economies, and the potential impact of further tax increases on investment, employment, high streets and the growth of the illegal gambling market.
Timing is very much everything here, with Andy Burnham, the highly likely next Prime Minister in waiting, having a history of voicing his opposition to the high street betting sector.
That being said, as a possible future UK leader very much focused on growing the North of England, the potential economic hit on the Northern high street and job losses as a result may well be enough of a deterrent to halt Burnham from taking drastic action against high street betting.
