The boss of Entain, the company that owns major UK betting brands Ladbrokes and Coral, has warned the government against raising gambling taxes.
If Rachel Reeves, the Chancellor of the Exchequer, decides to increase gambling taxes, betting shops are likely to be severely affected. Last month, Labour MPs sent a letter calling for a rise in gambling tax, specifically to make the rates for online and in-person gambling the same.
This would increase the tax level on slot and gambling machines from twenty percent to fifty percent.
Stella David, the head of Entain, told The Times that if taxes do rise, the company would have to “consider its investment level in the UK.” This could mean the closure of Entain-owned shops as a result of rising operational costs.
She also told the paper that areas of investment may need to be reviewed, warning that the tax increase would have a “dislocating impact on the industry.”
Will Betting Shops Close?
Entain has a portfolio of more than 2,000 betting shops across the UK, and with rising taxes, some of these outlets will likely close. In addition, with Keir Starmer’s plans to give residents more power to reduce the number of gambling shops on their high streets, the overall presence of betting shops could decline further.
David has warned that any tax increase would have “unforgivable” effects on the gambling industry, as higher taxes would make some shops financially unviable.
However, it would not be a complete loss for Entain. As the company owns several major UK betting brands, it could redirect investment towards the online casino sector if new tax rules are introduced.
Even so, the future of gambling taxes remains uncertain until Reeves announces her plans in the November budget.
Her proposals are expected to be unveiled on 26 November. She has already expressed support for lowering taxes for retail businesses and has stated her desire to help smaller companies grow through her budget measures.
Has Reeves Confirmed The Plans?
At the moment, Reeves has not confirmed whether she will raise the gambling tax. She did say at the Labour Party conference in Liverpool last week that “there is a case” for it, because the gambling industry contributes so much to the economy.
Interestingly, David was asked if she would move Entain’s base of operations to the US due to the rising potential tax, and she said they may consider it in the future if the move suits their business needs.
However, the Entain boss also warned that raising gambling taxes will result in customers going to the black market and unregulated sites.
“Black market operators are there to take as much cash out of the UK as possible, with as little friction. They can look very slick and very professional. The problem is none of the profits they make come back in tax to the UK government,” David told The Times.
Will the Gambling Industry Lose Business?
Unfortunately, if the government adopts the proposed changes supported by Labour MPs and former Prime Minister Gordon Brown, the industry will suffer a setback.
There will be a loss in revenue and a closure of betting shops that aren’t making enough money, because they will become too expensive to stay in operation. While UK gambling charities are welcoming a larger tax, industry figures are strongly fighting against it, and it’s only a matter of time before we find out which way this will go.
