Almost 90 Labour MPs support the initiative to raise the MGD on Category B gaming machines to 40%, ahead of the Autumn Budget presented by the government. The tax hike proposition has also received the backing from Gordon Brown.
The initiative is being spearheaded by Alex Ballinger, MP for Halesowen, who has urged the Chancellor to follow the advice of the Social Market Foundation (SMF). The estimate from SMF reveals that increasing the MGD might accrue wealth of £275 to £458 million in tax revenue annually.
Category B machines are permitted to hand out winnings of up to as much as £500. Such machines can be seen in nearly every betting house, bingo place or arcade of the UK. The existing MGD presents varying range from 5% to 25%.
The supporters of the increase claim that gambling venues tend to take root and flourish in worse-off neighbourhoods and regions and that gambling terminals which enable high winnings generate more gambling-related negative outcomes. Ballinger suggested bringing all possible exemptions to the application of the index to the machines operating in pubs.
The gambling industry has cast doubt on the legislation. According to the Bingo Association, Bacta and the Betting and Gaming Council, raising taxes could lead to loss of jobs in this sector. Several gambling campanies already announced plans of cutting jobs and closing betting shops in UK.
Furthermore, the Betting and Gaming Council promotes its Back Our Betting Shops campaign, opposing any attempt to put more pressure on gambling businesses.
Fred Done, the founder of Betfred, indicated that if MGD was increased, high street bookies would be out of business by 2030. According to Rank Group, one-third of its venues would need to shut down as a result of tax increases. In addition, over 1,000 representatives from the greyhound racing industry wrote a letter against the proposed tax increase.