Seaside arcades in Britain are facing a potential threat of closure if gaming taxes are increased, according to industry leaders. They claim that a proposed hike in slot machine duty from 20% to 50% could lead to the shutdown of all 400 venues, significantly impacting coastal towns. The repercussions could extend to high street gaming centers, pubs, and working men’s clubs with fruit machines.
The gambling industry is intensifying its efforts to oppose tax hikes ahead of the upcoming Budget. Former Labour PM Gordon Brown has supported proposals by the Institute for Public Policy Research to address the perceived undertaxation of the gambling sector, aiming to raise £3.2 billion to combat child poverty. While there is a push to update regulations in response to the surge in online betting over the past two decades, concerns have been raised that measures to tackle gambling addiction may inadvertently harm traditional forms of betting enjoyed for generations.
Joseph Cullis, president of Bacta, the trade body representing seaside arcades and adult gaming centers, cautioned that doubling the current machine games duty from 20% to 40% or 50% could devastate the industry. He emphasized the community-centric nature of these businesses, which provide local employment, support tourism, and contribute to the vibrancy of high streets and seaside towns. Operators fear the potential catastrophic impact of such tax increases.
The Treasury has indicated a commitment to strike a balance in the Budget, ensuring sufficient funding for public services while fostering growth and investment in businesses. The focus remains on proposed gambling tax hikes to address issues of gambling harm and child poverty.
Various tax proposals have been put forward, including doubling the remote gaming duty from 21% to 50% to generate an additional £800 million annually. Increasing the machine games duty rate from 20% to 50% could raise tax revenues to £900 million per year. Betting firms, exempt from VAT, have seen varying degrees of success, with some reporting substantial profits. The industry heavily relies on bookies and gambling firms for prize money and sponsorship, making them vulnerable to profit reductions from potential tax raids.
The debate surrounding tax reforms is complex, with industry insiders highlighting potential unintended consequences on less harmful gambling activities. Suggestions to revise specific duties for bingo and horse racing have been proposed to mitigate adverse effects. The industry argues that players may face inferior odds or be driven towards illicit gambling providers, although critics downplay the perceived risks of a black market, citing the regulatory framework in place for licensed operators.
Overall, the gaming industry faces challenges as it navigates potential tax changes that could have far-reaching implications on various sectors within the gambling landscape.