The Betting & Gaming Council (BGC) has warned that UK gambling tax hikes could risk thousands of jobs.
The proposed tax hikes supported by Labour MPs aim to increase taxes on sports betting businesses from 15% to 30% and on online slots from 20% to 50%.
If any tax rises are announced, Chancellor of the Exchequer Rachel Reeves will reveal them in the Autumn Budget on November 26.
Industry leaders have strongly warned against the tax increases. Betfred has announced that store closures will be imminent if gambling taxes increase. Meanwhile, Paddy Power announced the closure of 29 UK stores earlier this month due to “cost pressures and challenging market conditions”.
Although the betting brand stopped short of blaming the proposed tax hike, several rivals have cautioned that higher taxes could trigger mass closures, making large retail estates financially unsustainable.
Now the BGC has added fuel to the fire in a new report, concluding that 40,000 jobs and a £3 billion loss to the economy could occur if taxes go up.
What Did The BGC Report Say?
The report came to three devastating conclusions. Tax hikes will:
- Mass impact jobs in igaming.
- Cause a huge loss to the UK economy.
- And drive customers into black market sites.
Working with the SMF and IPPR think tanks, the BGC concluded there will be thousands of job losses and the billions in losses to the UK economy.
For the organisation itself, they claim their huge contribution to the economy and the jobs they support will be affected because of taxes. In fact, they say raising taxes will “dismantle that success.” For reference, the BGC says they already pay £4 million in tax.
Grainne Hurst, Chief Executive of the BGC, called the tax increase a “direct threat to British jobs and economic growth.”
The other impact will be a loss in business for areas of the gambling sector where the taxes will apply, including bingo halls and land casinos.
The report also found that the proposed plans would fall far short of generating the level of tax revenue their supporters expect.
As you know, experts have warned that any short-term boost wouldn’t last, as higher taxes would drive players away from licensed sites because of worse odds, fewer bonuses, and less choice for bettors.
A Balanced Approach Is Best
The BGC also concludes that the only way increasing taxes could be beneficial to the industry is if a balanced approach is applied.
Hurst argued that a balanced approach would ” guarantee a growing regulated sector”, although the current proposals would drive customers towards the black market, where there are no safety rules and jobs available.
However, this is subject to debate.
High streets have also been highlighted as a major area where tax increases will cause fallout. We know this from recent warnings issued by betting brands over betting shops.
It seems the calls for tighter regulation are supported by the betting industry to some extent, but the looming prospect of taxes are hanging over gambling businesses like an unwelcome guest.
