The United Kingdom recently increased its online gaming duties, much to the industry’s dismay, forcing operators to close shops and streamline their businesses. While gaming stakeholders have repeatedly warned against further taxes, saying that it would hurt the industry, lawmakers are now eyeing an increased rate for Category B machines.
Labour Supports MGD Hike
Some 89 Labour MPs have backed a letter calling for an increased Category B machine duty. Authored by Alex Ballinger, who chairs the APPG for Gambling Reform, the letter encourages Chancellor John Healey to consider a machine gaming duty (MGD) hike.
In his letter, Ballinger argues that gaming operators “should not be allowed to pocket the profits while families and communities pick up the bill.” At the same time, he said that high streets should create jobs and opportunity and not high-harm gambling centers.
The letter therefore appeals to last year’s hikes, which led to a significant increase in online gaming and betting taxes, asking Category B machines to be treated similarly. In line with an earlier proposal that encouraged a doubling of the MGD to 40%, the current letter said that an MGD rate of 40% would benefit the economy, raising between GBP 275 million and GBP 458 million a year. However, it should be noted that the letter does not specify that an MGD hike must necessarily mean increasing the tax rate to 40%.
The letter also refers to recent polling by the Social Market Foundation, which suggests that 43% of Brits support higher slot machine taxes. At the same time, only 11% believe the taxes should be reduced.
The Industry Is Not Pleased
The industry was quick to comment on the letter, expressing disappointment with the strong support for higher MGD. Speaking to gaming news outlet NEXT.io, Grainne Hurst, CEO of the Betting and Gaming Council (BGC), said that while MPs’ concerns for communities and high streets are commendable, their approach is misguided.
Hurst argued that higher taxes on betting shops and casinos will not achieve a safer market. Indeed, the BGC has previously argued that placing additional burdens on the gambling sector would make it less competitive, granting more strength to illegal gambling operators. At the same time, the burdens will result in additional shop closures – something that has already been happening following the previous tax hikes.
MPs calling for higher taxes should consider the consequences for the very communities they say they want to protect. Every closure means another empty shopfront, fewer jobs and another blow to Britain’s high streets.
Grainne Hurst, CEO, BGC
At the same time, Bacta, a trade association representing the land-based gaming industry, said that embracing a 40% MGD would put the final nail in the coffin of the British seaside, resulting in thousands of lost jobs.