Potential Tax Increases Threaten Betting Shop Viability
Betfred, one of the UK’s leading sports betting operators, has reportedly stated that potential tax increases in the upcoming budget could force the closure of all its 1,287 high street shops. According to sources familiar with the matter, the company claims such a move would eliminate profitability and risk approximately 7,500 jobs across the country.
The warning comes amid speculation that Chancellor Rachel Reeves is considering substantial tax increases on the gambling industry to address a potential £30bn shortfall in public finances. Analysis from the Institute for Public Policy Research, which has close links to Labour, estimates that such increases could raise up to £3.2bn annually.
Industry Leaders Voice Concerns Over Profitability
Fred Done, billionaire chair and co-founder of Betfred, reportedly told the BBC that the industry “doesn’t even need to go up to 50%” to become unprofitable. “If it went up to anywhere like 40%, or even 35%, there is no profit in the business,” Done stated. “We would have to close it down. I’m talking job losses. We’re talking probably 7,500.”
Betfred CEO Joanne Whittaker echoed these concerns in comments to the Sunday Times, stating: “The most frightening element is we’re going to lose the whole retail business. I’m not scaremongering … I’m not being alarmist.”
Broader Industry Impact and Regulatory Context
The gambling industry has been intensifying its lobbying efforts as speculation grows about potential tax increases. Reports indicate the government is considering raising taxes on sports betting firms from the current 15% to 30%, and increasing online slots taxation from 20% to 50%.
Other major operators have expressed similar concerns. Betfred’s rival William Hill reportedly stated it could close up to 200 betting shops, potentially affecting 1,500 jobs. Stella David, chief executive of Entain, the FTSE 100 owner of Ladbrokes and Coral, has also indicated that higher gambling taxes could lead to shop closures and investment being diverted to other countries.
Political and Economic Considerations
Former Prime Minister Gordon Brown has reportedly been pushing for the tax changes, arguing that additional revenue could be used to alleviate child poverty across the UK. Brown noted that, excluding the lottery, the £11.5bn betting and gaming industry paid only £2.5bn in tax last year. “As much as £3bn extra can be raised from taxing it properly,” he stated.
A Treasury spokesperson responded to the closure threats by stating: “We do not comment on speculation around future changes to tax policy. We are consulting on bringing online betting in line with other forms of online gambling to cut down bureaucracy. It is not about increasing or decreasing tax rates, and we welcome all views.”
Financial Performance and Regulatory History
According to its latest earnings report, Betfred made £500,000 in operating profit on £900,000 in revenues following a series of writedowns on its assets in 2023. The company has yet to release its earnings report for 2024, a year in which it was fined £3.25m by the Gambling Commission for social responsibility and anti-money-laundering failures.
Industry analysts suggest that the potential tax increases come at a challenging time for the sector, which has been navigating casino operations and broader industry developments amid economic pressures. The sector continues to monitor market trends and related innovations that might affect operational costs and profitability.
As the budget announcement approaches, stakeholders are watching how the government will balance revenue generation against potential job losses and business closures. The situation reflects broader challenges in regulating industries while considering economic impacts, similar to concerns about recent technology and regulatory frameworks across various sectors.
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