Betfred Warns of Shop Closures as Gambling Tax Hike Looms

The UK bookmaker Betfred has issued a stark warning about the potential closure of nearly 1,300 betting shops if a proposed increase in gambling taxes is enacted. This development could jeopardize the jobs of approximately 7,000 employees across the country. Fred Done, Betfred’s chairman and co-founder, characterized the looming tax change as the “biggest threat” the gambling industry has ever encountered.

Concerns surrounding the tax hike stem from a proposal initially put forward to Chancellor Rachel Reeves by former Prime Minister Gordon Brown. The aim was to utilize increased gambling tax revenues to combat child poverty. However, the Betting and Gaming Council, which represents various gambling companies, has heavily criticized this proposal, labeling it “economically reckless.” They warn that such an increase could drive gamblers to the black market.

Betfred’s financial health already faces significant challenges, with numerous shops operating at a loss. Chairman Done revealed that an increase in taxes would exacerbate these losses. Despite reporting a profit of £1 billion in its most recent annual report, the company’s operating costs consumed half of that amount.

Industry Concerns and Responses

The potential tax hike is not an isolated concern. Several gambling companies have expressed their opposition to the proposed increase. According to estimates from the Institute for Public Policy Research (IPPR), a near 50% increase in gambling tax could generate around £3.2 billion for public finances. However, industry players argue that the repercussions could be severe, leading to widespread shop closures.

For instance, Evoke, the owner of William Hill, has indicated that up to 200 shops could close if the new tax law passes. Similarly, rival bookmaker Paddy Power has already announced plans to shutter over 50 locations in the UK and Ireland, potentially affecting around 250 jobs. The betting company Entain has also indicated that it may consider closures under the new tax regime.

Done has shared insights into the future of high street gambling, suggesting that the industry may gradually shift online. “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,” he commented.

Implications for Public Policy

The Chancellor faces mounting pressure to address a public finance shortfall of £50 billion, leading to speculation about the upcoming Autumn Budget. Professor Ashwin Kumar, the director of research and policy at the IPPR, argues for a reconsideration of gambling taxation. He stated, “We know that most of the profits made by gambling companies come from a very small number of gamblers, many of whom are at risk of serious harm. And so we think that the duties should be higher, just like tobacco and alcohol.”

In light of these discussions, the charity GambleAware has called for further regulation to protect vulnerable individuals, particularly children, from the risks associated with gambling.

As the debate around gambling taxation continues, the future of the industry remains uncertain, with potential consequences for both businesses and consumers in the UK.