Betfred founder Fred Done has warned that further tax increases on gambling could lead to widespread betting shop closures, job losses, and a further decline of the UK high street.
Speaking to the Financial Times over the weekend, the 83-year-old businessman said a potential doubling of Machine Gaming Duty (MGD) from 20% to 40% could force Betfred to close 495 shops within a year.
Betfred currently operates around 1,094 retail shops across the UK. Done said the closures could result in the loss of 2,575 jobs and around £67 million (US$89 million) in foregone tax revenue for the Exchequer.
The proposed MGD increase is reportedly being considered by Chancellor John Healey ahead of the Autumn Budget.
Betfred’s retail operations remain heavily reliant on fixed-odds betting terminals (FOBTs) and other in-shop gambling. Despite the maximum stake on FOBTs being reduced to £2 (US$2.67) in 2019, Done said the machines account for about half of the company’s shop profits.
Betfred has already closed 132 shops this year following last year’s increase in Remote Gaming Duty (RGD).
“We have tried hard to protect all our sites and the colleagues who work in them, but the combined impact of higher employer National Insurance contributions, wage inflation, increases in gambling taxes and wider economic uncertainty has left us with no choice,” Chief Executive Jo Whittaker told iGB at the time the closures were announced.
Evoke also closed 200 William Hill shops in April, citing similar pressures. Entain CEO Stella David has also warned about the potential impact of a higher MGD rate, forecasting an additional £100 million (US$134 million) in operating costs if the measure is introduced.
In a letter to the UK Prime Minister last week, David highlighted the potential impact on high street workers and communities. “They are people losing their jobs and communities losing long-established high-street businesses,” she wrote.
Done said the potential closures form part of a wider decline in high street venues and predicted that betting shops could disappear entirely by 2030. “I believe that by 2030 we will have no betting shops. The high street will be dead. We’ve already worked it out that with the increases in taxes and salaries and other wages it won’t be worth operating,” he said.
Betfred currently sponsors Britain’s five classic horse races, including the Epsom Derby. Done said the company had yet to agree to extend those sponsorships amid uncertainty over gambling taxes. He also warned that a reduction in regulated gambling provision could push problem gamblers towards the black market.
Done rejected comments from Dame Meg Hillier, Chair of the Treasury Select Committee, who has described some industry warnings over the tax proposals as “scaremongering”.
The retail betting sector has also faced other potential planning changes. Burnham recently said he would scrap “aim to permit” provisions for betting shops, while adult gaming centres (AGCs) would require planning permission to operate.
Done also questioned the tax burden on wealthy business owners, saying his family paid £400 million (US$534 million) in taxes last year. “They keep saying those with the broadest shoulders should be paying more tax. Well, how broad do my shoulders have to be?” he said.