Betting giants say Budget tax raid will hurt jobs, close bookies and boost black market

Britain’s biggest gambling firms have warned the Budget tax raid on the sector will cost jobs, close high street bookies and strengthen illegal black market operators.

The Chancellor’s latest Budget raised the remote gaming duty levied on online casinos from 21 to 40 per cent, and lifted the levy on online sports betting from 15 to 25 per cent.

However, horse racing was spared from online sports betting hike and the Chancellor also abolished a so-called ‘bingo duty’ of 10 per cent.

Analysts say the £1.1billion tax raid is bad news for the smallest operators, which face being bought out by the biggest firms. 

The chief executive of Evoke – the owner of William Hill and 888 – Per Widerstrom said the raid was ‘ill-thought-through, counter-productive, and highly damaging’.

He warned Evoke will now slash investment into the UK, and said there was a ‘likely need for thousands of jobs to be cut up and down the country’.

Winners and losers: Horse racing was spared from online sports betting hike and the Chancellor also abolished a so-called ‘bingo duty’ of 10%

‘These tax changes will reduce the overall level of tax the regulated industry pays in the UK,’ he added.

On Thursday morning Flutter Entertainment, which owns Sky Bet and Paddy Power among its stable of brands told shareholders the changes would hit the group’s projection for adjusted earnings by $320million next year and $540million in 2027.

UK and Ireland boss Kevin Harrington described the tax raid as ‘very disappointing’, adding it will ‘have a significant adverse impact on our industry’.

He warned the Chancellor the changes, due to come in from April, are ‘a big win to illegal, unlicensed gambling operators who will become more competitive overnight’.

Harrington said: ‘These black market operators don’t pay tax and don’t invest in safer gambling.

‘At 40 percent, the UK’s remote gaming duty is now above countries such as the Netherlands, where a recent tax increase saw a rise in illegal gambling and a fall in Government receipts.’

However, Flutter says the changes ultimately leave the group as a comparative advantage.

It said: ‘As the largest scale operator, Flutter has the opportunity to deliver material second order mitigation benefits, including market share gains.

‘We believe this, combined with additional operational efficiencies, will provide substantial opportunities to help offset the impact in the medium-term.’

Richard Williams, gambling partner at Keystone Law, explained the changes are likely to lead to ‘significant consolidation in the online industry’, with the biggest firms swallowing up smaller rivals, and ‘the closure of large numbers of betting shops’.

He added: ‘The Budget did not make any changes to machine games duty or gaming duty for land-based casinos, so some sectors of the industry will be pleased to have been spared, for now.’

Investors in Mecca bingo owner Rank initially welcomed news the 10 per cent duty levied on operators in the sector would be abolished, with shares in the group soaring on Wednesday.

But Rank, which also owns Grosvenor casinos, said the Budget would ultimately result in £40million in extra costs annually as a result of the hike in remote gaming duty.

Rank shares plunged 7.5 per cent to 109.2p in early trading.

Chief executive John O’Reilly said remote gaming duty going up is a ‘very significant blow to the regulated betting and gaming industry in the UK’.

He added: ‘Whilst we are pleased that the Government has abolished bingo duty which will help to sustain jobs and investment in the land-based sector, the far more significant impact on the Group is the hit to digital profitability.’

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