Seaside arcades in Britain are at risk of closure if gaming taxes are increased, according to industry leaders. They argue that a potential hike from 20% to 50% in slot machine duty could have devastating effects on coastal towns, potentially leading to the closure of all 400 venues and impacting high street gaming centers, pubs, and working men’s clubs with fruit machines.
The gambling industry is rallying against proposed tax increases in the upcoming Budget, with former Labour PM Gordon Brown supporting a recommendation from the Institute for Public Policy Research to target the supposedly undertaxed gambling sector. The estimated £3.2 billion raised from these measures is proposed to address child poverty concerns. Despite efforts to combat gambling addiction, there are worries that such actions could inadvertently harm traditional forms of betting enjoyed for generations, including implications for the horseracing industry.
Joseph Cullis, president of Bacta, emphasized the importance of maintaining the current 20% machine games duty, warning that an increase to 40% or 50% could spell disaster for the industry. He highlighted the vital role these community-based businesses play in providing local jobs and supporting tourism in seaside towns like Blackpool.
The Institute for Public Policy Research’s recommendations include significant tax adjustments aimed at increasing revenue, such as doubling the remote gaming duty from 21% to 50% to generate an additional £800 million annually. Other proposed changes include raising the machine games duty from 20% to 50% to potentially collect £900 million a year and increasing the general betting duty from 15% to 25% to raise an extra £500 million, excluding horse racing from these adjustments.
Critics argue that the gambling industry’s exemption from VAT provides unfair advantages, with some operators experiencing substantial profits. Concerns have been raised about potential impacts on prize money and sponsorship within the industry as a result of new tax measures.
Operators in the bingo sector are particularly concerned about potential changes to the remote gaming and machine games duties, which could affect investments in bingo halls. While there are efforts to address addictive forms of gambling, there are challenges in targeting specific sectors without unintended consequences. Suggestions to lower or eliminate specific duties related to bingo and horse racing have been proposed as potential solutions.
The industry contends that players may face worsened odds or turn to illicit gambling sources if tax hikes are implemented, with warnings of potential mass closures of betting shops. However, critics argue that concerns about the black market are exaggerated, given the licensing requirements for gambling firms in the UK, and suggest that companies have the option to adjust profit margins accordingly.