Gaming machines and slots could be set to feel the wrath of tax hikes, as the Social Market Foundation (SMF) has made its proposals to the incoming Prime Minister, Andy Burnham.
Bacta and the BGC have both been critical of the proposals to raise tax on machines from 20% to 40%, warning that they would have a significant impact on jobs.
At this stage, it feels like the lobbying is in its early days, but there will be a lot of nervousness that taxation hikes on land-based slots are looming.
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.
She said: “We fundamentally oppose any increase in MGD, and nothing in this report justifies such a damaging policy.
“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.
“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.”
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.
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.”