Betfred Threat to Close All UK Outlets as $3.2B Tax Hike Looms
If the British government increases the taxes on sports betting and slots, UK betting company Betfred says it will shut down all 1,287 of its retail betting locations.
In order to close a £30 billion deficit in public finances, Chancellor Rachel Reeves may be preparing a £3.2 billion tax increase for next week's budget. That is, assuming she follows the recommendations of the Institute for Public Policy Research (IPPR), a think organization closely associated with the current Labour Party.
Gordon Brown, a former Labour prime minister, is supporting the IPPR's recommendations, claiming they could lessen child poverty in the UK.
According to Reeves, there is "a case" for gambling enterprises to pay higher taxes, and "we will make sure that happens."
Offensive to the Media
The threat has increased the gambling industry's efforts to woo the media and engage in lobbying.
In an interview with the BBC, Fred Done, 82, the founder and chairman of Betfred, cautioned that his network of physical betting establishments would be shut down by the think tank's suggested rise, which would raise the sports betting fee from 15% to 30% and the slots tax from 20% to 50%.
"If [the overall tax rate] went up to anywhere like 40%, or even 35%, there is no profit in the business. We would have to close it down. I’m talking job losses. We’re talking probably 7,500,” he told the BBC on Sunday.
Since he and his brother, Peter Done, started Betfred as a single betting shop in Manchester, England, in 1967, the billionaire tycoon claimed that such an increase would be the "biggest threat" to the sector.
Joanne Whittaker, CEO of Betfred, told The Times of London that the company's stance was neither "alarmist" nor "scaremongering."
“The most frightening element is we’re going to lose the whole retail business,” she said.
Additionally, William Hill has issued a warning that it might have to close 200 bookmakers, which would affect 1,500 jobs; Entain's Ladbroke's Coral has also issued a warning about closures.
Do You Remember?
The government's decision to reduce the maximum stakes on fixed-odds betting terminals (FOBTs) from £100 to £2 posed the final significant danger to the UK's retail betting sector. Once more, the sector warned of thousands of job losses and widespread closures.
Hindsight reveals that the bookies were leaning toward a worst-case scenario, but this wasn't just scare tactics—their worries were grounded in the actual danger of losing a significant source of income.
William Hill projected up to 900 closures, or around 40% of its retail locations, before those reforms. In actuality, the sector's total number of stores decreased by around 25% over the ensuing years. This decline was still notable, but it was partially caused by unanticipated factors, most notably the pandemic.
