UK bookie, and online casino, Betfred could shutter all 1,287 betting shops if the UK Government follows through with gambling tax hikes, warns Co-Founder and Chairman Fred Done.
Speaking to the BBC, Done outlined that the threat posed by rumoured levy increases represents the industry’s biggest challenge since establishing Betfred with his brother in 1967:
“I think this is the biggest threat I’ve ever known since I’ve been in the industry. All the alarm bells are ringing.”
Up to 7,500 jobs are now at risk of being lost should Betfred close its retail premises in the face of these proposed tax rate changes, says Done: “It (gambling tax) doesn’t even need to go up to 50%. If it went up to anywhere like 40% or even 35% there is no profit in the business. We would have to close it down. I’m talking job losses. We’re talking probably 7,500.”
Done’s concerns echo industry-wide anxiety following Chancellor Rachel Reeves’ comments to ITV – in which the Labour official promised to ensure that gambling operators “pay their fair share” in taxes.
Further, studies suggest that escalating operator tax obligations could raise £3.2bn, with most of that funding planned to protect families from poverty. According to a report by the Institute for Public Policy Research, the Government would need to more than double existing operator charges to achieve this figure.
Done’s worry is not his alone – recently, William Hill considered closing 200 shops if the Government’s mooted tax hikes come to pass. Paddy Power has also been hit by rising costs, closing 57 shops following a review of retail performance.
Meanwhile, the Betting and Gaming Council fears that tax surges could inadvertently force players towards illegal, offshore markets. This is an issue well understood by Done, who stated that there are “plenty” of unregulated bookmakers prepared to onboard domestic players:
“Once the (UK) industry is closed down, it’s gone. People will still bet, but they’ll bet offshore with it. There’s plenty of bookmakers offshore who happen to take the bets, who don’t pay anything to this country.”
Perhaps most pertinent is that 300 of Betfred’s betting shops operate in the red. A 5% tax increase could bump that number to 430, making 33% of the firm’s physical venues unprofitable.
Gambling tax rises to quicken high street decline?
As things stand, sports betting and horse racing operators pay 15% in tax commitments, while those overseeing retail slots (20%) and online casinos (21%) are charged at a greater rate.
Even without heightened taxes, Done anticipates that high street UK bookmakers have around two decades of active business remaining – with the allure of online gambling proving decisive for betting shops and, as a result, thousands of domestic jobs.
“Slowly it will go online, but we’re talking, without tax increases, we’ve still got probably 20 years of life on the high street. And you know, the UK high street is being decimated with closures.”
Two crucial questions now beckon: will the Government succeed in accumulating up to £3.2bn in additional taxes from operators, or might this change have a ripple effect on player spending? Much will become clear after November’s budget…
