Key Moments:
- The Betting and Gaming Council (BGC) has warned that raising UK gambling taxes could remove £3.1bn from the economy and put up to 40,000 jobs at risk.
- A report by EY-Parthenon, commissioned by the BGC, outlined several tax hike scenarios, with some potentially increasing black market activity by £400m.
- Retail gambling operators have indicated possible closures of hundreds of betting shops if higher duties are introduced.
Economic Risks Surface Ahead of Budget Announcement
The Betting and Gaming Council (BGC) has cautioned that proposed increases to UK gambling taxes may have severe consequences for the country’s economy and job market. This statement arrives shortly before the UK government is expected to unveil new tax strategies in the budget on November 26.
Although the final policy decisions remain unannounced, several recommendations under consideration propose raising taxes on betting, gaming, and remote gambling activities.
EY-Parthenon Report Explores Tax Scenarios
A study conducted by EY-Parthenon, titled “Impacts of Changes to Betting and Gaming Regulation,” was commissioned by the BGC to analyze the potential outcomes of various tax changes. The report modeled scenarios involving increases to general betting, remote gambling, and machine gaming duties.
According to the report’s findings, increasing all three duties to a uniform rate of 21% could initially raise government revenue by £250m but also potentially boost black market betting activity by £400m, erasing tax gains and resulting in around 3,000 job losses.
One scenario, based on analysis by the Institute for Public Policy Research (IPPR), considered raising duties as high as 50%. Under this model, the sector’s gross value added (GVA) could decrease by £3.1bn, accompanied by job losses potentially totaling 40,000.
The Social Market Foundation (SMF) evaluated a plan to set remote gambling duty at 50% and betting duty at 25%. While this approach might generate £1bn more in tax revenue under moderate conditions, the same plan could, in a higher elasticity environment, fuel £8bn growth in the illegal market and cause over 30,000 job losses.
Industry Leaders and Operators Express Concerns
BGC CEO Grainne Hurst emphasized that the data demonstrates significant risks for both the industry and its workforce. Hurst said:
“Figures speak for themselves. Tens of thousands of jobs lost, billions diverted to the black market and a possible £3 billion hit to the economy.”
Hurst further warned that betting shops, bingo halls, and casinos would be among the hardest hit and stressed a likely migration of players to unregulated gambling options. She remarked:
“Tax raids like those proposed would mean fewer betting shops, casinos and bingo halls, fewer jobs and a huge boost to the growing, unsafe gambling black market, while not raising anywhere near the tax claimed.”
She went on to urge the government to pursue a balanced approach for regulatory stability, stating:
“These proposals would achieve the absolute opposite,” and “Britain’s betting and gaming sector is a world leader – employing thousands, paying billions in tax, and investing in British sport. The choice is clear: back a successful, sustainable, regulated British industry – or risk losing jobs, investment and growth.”
Potential Shop Closures and Ongoing Uncertainty
Retail gambling operators have echoed these concerns. A Sunday Times report indicated that William Hill might close between 120 and 200 betting shops if the proposed tax increases go into effect. Flutter Entertainment revealed its intention to shutter 57 Paddy Power locations across the UK and Ireland, referencing rising business costs and broader economic challenges.
Entain CEO Stella David suggested that further closures could be considered as companies evaluate the need to reduce costs and contend with higher taxes.
Industry Awaits Fiscal Policy Decision
As the UK Treasury prepares to finalize its strategy, industry representatives argue that steeper taxes could inadvertently strengthen illegal gambling activities, offsetting consumer protection advances and undermining responsible gambling efforts. The choices made in the upcoming budget will determine whether regulatory reform secures sustainable growth or triggers contraction in the gambling sector.
| Scenario | Projected Additional Tax | Estimated Black Market Growth | Estimated Job Losses | Estimated GVA Impact |
|---|---|---|---|---|
| All duties aligned at 21% | £250m | £400m | ~3,000 | N/A |
| IPPR proposal (duties up to 50%) | N/A | N/A | Up to 40,000 | -£3.1bn |
| SMF plan (remote at 50%, betting at 25%) – moderate elasticity | £1bn | N/A | N/A | N/A |
| SMF plan – high elasticity | N/A | £8bn | 30,000+ | N/A |
The industry now stands at a crossroads, with policymakers facing a decision that could significantly influence the future of the UK gambling sector.
- Author
Daniel Williams
