Bingo operators have warned Prime Minister Andy Burnham that a proposed increase in gambling tax on slot machines could lead to venue closures and job losses across the UK.
The Prime Minister and Chancellor are reportedly considering doubling machine games duty on slot machines from 20% to 40% in next month’s Budget.
The chief executives of Rank Group, owner of Mecca Bingo, and Buzz Bingo, the UK’s two largest bingo operators, said bingo halls could be affected by the proposed increase.
“Unless bingo clubs are protected from such reform, the viability of bingo in the UK will be at risk,” Buzz Chief Executive Dominic Mansour told This Is Money. “The numbers for Britain’s bingo could truly be up.”
Rank Chief Executive Richard Harris, who runs 41 Mecca sites and 47 Grosvenor casinos, said increasing machine games duty from 20% to 40% would cost the company £35 million (US$47 million). He said the increase would make between a quarter and a third of the company’s venues “unviable”, with a large proportion of those sites potentially closing.
The closures could put up to 25% of Rank’s 6,500-strong UK workforce, or about 1,625 jobs, at risk. Harris said many of the sites and jobs affected are in Red Wall constituencies across northern England.
Mansour said even increasing the levy from 20% to 25% would leave about a third of Buzz Bingo’s estate loss-making. “That would not only put our investment programme at risk but would lead to undoubtedly difficult decisions about clubs and jobs,” he said, writing for the Daily Mail and This is Money.
He added that a blanket increase in machine games duty to 40%, which would apply to bingo halls as well as adult gaming centres with slot machines, “risks undoing the positive impact the abolition of bingo duty was meant to achieve”.
“For us at Buzz Bingo, at its worst this would mean the closing of clubs and would be a huge risk to jobs,” Mansour said.
The comments follow remarks from the chief executive of Entain, the owner of Ladbrokes and Coral, who said this week that doubling machine games duty could result in the closure of 1,470 betting shops and the loss of 15,900 jobs.
The gambling industry is also facing an increase in remote gaming duty from 21% to 40% and an increase in the tax on online sports betting from 15% to 25%. About 5,000 jobs have been lost at bookmakers since the tax increases were announced in the previous Budget. However, the previous chancellor also abolished the 10% bingo duty, providing a tax reduction for the sector.
Harris said he is due to meet Treasury officials to discuss the proposed changes. He said that he does not believe ministers ‘want to close bingo clubs’.
“The risk is they are targeting a specific part of the gambling sector they do not like. The risk to us is that we are collateral damage,” he explained.
“If you increase the tax rate, that moves both casinos and bingo halls to be loss-making,” Harris continued. “If they become loss-making, over time we are going to have to close those venues. That is less jobs and investment.”
Harris said that closures would result in the loss of other taxes paid by casinos and bingo halls. “Within 12 months, if the tax rate goes up, the tax take goes down.”
Harris said bingo clubs are located in communities and provide entertainment to customers, while casinos form part of the nighttime economy. He said Rank staff are “living in fear” of what a tax increase could mean for their jobs, adding that the majority of its workforce is in Red Wall constituencies, largely in northern parts of the country.
Mansour described bingo clubs as “local, social and low risk.”
“For some members, a visit to their local club is a cheap fun night out with friends. For others, it may be one of the few times in the week when they know they will see familiar faces,” he said.
“In an increasingly fragmented world, bingo clubs have become the heart of communities,” Mansour continued. “A local and safe place, where people can go to meet people from their community, share a drink and feel like they are part of something.”
A Treasury spokesman said the Chancellor is focused on giving families and businesses “a bit of breathing space”, supporting British jobs and driving growth while meeting the government’s fiscal rules. “As has always been the case, decisions on tax are a matter for the Chancellor to set out at fiscal events, rather than routinely commenting on rumour, speculation or proposals.”