Britain’s seaside arcades are under threat of closure if gaming taxes see a significant increase, as warned by industry leaders. They argue that raising slot machine duty from 20% to 50% could potentially force all 400 venues to shut down, severely impacting coastal towns. This move could also have negative repercussions on high street gaming centers, pubs, and working men’s clubs with fruit machines.
The gambling industry is intensifying efforts to prevent tax hikes in the upcoming Budget. Former Labour PM Gordon Brown has supported proposals to target the supposedly undertaxed gambling industry, aiming to raise £3.2 billion to address child poverty. While the goal is to reduce gambling-related harm and update outdated regulations, concerns have been raised about the unintended consequences on traditional forms of betting, particularly for industries like horseracing.
Joseph Cullis, president of Bacta, the trade body representing seaside arcades and adult gaming centers, emphasized the adverse impact of doubling machine games duty to 40% or 50%. He highlighted the community-based nature of these businesses, which provide local employment, promote tourism, and contribute to the vibrancy of high streets and seaside towns. Operators fear that even popular destinations like Blackpool could suffer significantly.
The Treasury has stated its intention to strike a balance between funding public services and fostering business growth in the Budget. The focus remains on proposed gambling tax increases to address gambling harm and child poverty issues.
Various levies currently apply to betting firms, with remote gaming duty being a significant revenue source for the government, generating £1 billion annually. The Institute for Public Policy Research suggests doubling this duty to 50% to collect an additional £800 million. Increasing the machine games duty from 20% to 50% could raise the tax revenue to £900 million per year. Additional proposals include raising the general betting duty and exempting horse racing, while leaving bingo and lottery duties unchanged.
Critics argue that the exemption of most forms of gambling from VAT provides an unfair advantage, leading to some operators experiencing substantial profits. The industry heavily relies on prize money and sponsorships from bookies and gambling firms, making them vulnerable to any further tax reforms that could impact their profits.
In conclusion, while the aim of proposed tax hikes is to address gambling-related issues, there are concerns about the unintended consequences on established forms of betting and the potential negative effects on businesses and communities reliant on the gambling industry.