British standards body Betting and Gaming Council has urged Chancellor Jeremy Hunt to rethink what it terms a ‘stealth tax’ on land-based casinos, which was confirmed in the Autumn Statement, a government document featuring economic forecasts and tax spending proposals.
Under measures announced by the Treasury, Gaming Duty Bands applied to U.K. casinos have been frozen again and will not rise with inflation, effectively creating a £5 million ($6.3 million) annual tax increase across BGC’s land-based casino members, says the body.
The industry was expecting the freeze, initially announced in March, to be lifted, providing support to a sector the body describes as grappling with rising wages, energy costs, and high inflation.
As per BGC, UK casinos employ more than 10,000 people catering to over 16 million customer visits every year, contributing £300 million ($378 million) annually in taxes and an estimated £800 million ($1 billion) a year Gross Value Added to the economy.
However, the BGC says some casinos have faced challenges recovering from the pandemic amid current economic difficulties, leading to closures and job cuts. The UK had 160 casinos in 2005, but the number has decreased to 117 in 2023.
Recent months have seen the closure of four casinos, including the Genting-owned Crockfords in Mayfair, the country’s oldest casino. In 2019, the casino industry employed 13,600 people, but the current count has decreased to under 10,200, marking a 25% reduction, BGC said.
“Freezing Gaming Duty Bands is a stealth tax, which has the potential to slow recovery and weaken future growth. Removing it would have provided a welcome boost for the land-based casino sector at a crucial time. Instead, the decision to maintain the status quo represents a missed opportunity for companies ready and able to generate jobs and investment across the country,” BGC CEO Michael Dugher said.
The body expressed support for the government’s gambling White Paper, particularly concerning casino reform, noting it is working closely with the government on the issue. The White Paper encompasses proposals on affordability checks, sports betting, and machine numbers.
However, the BGC warns that changes “must not risk driving customers to the unsafe, unregulated gambling black market” where betting numbers have reportedly doubled in recent years.
“Right now casinos, which play such a vital role in the tourism and hospitality sector, are waiting for the modest but mission-critical policy changes announced in the White Paper. It seems short-sighted to maintain this stealth tax while failing to make changes that will allow casinos to hire and grow. The BGC urges a re-think so Gaming Duty Bands can be moved with inflation at the next opportunity,” Dugher said.
As per the organization, the freeze on Gaming Duty Bands is expected to cost casinos £25 million ($31.5 million) over the next five years. BGC members combined contribute £7.1 billion ($8.9 billion) to the economy, and generate £4.2 billion ($5.2 billion) in tax while supporting 110,000 jobs, the body says.
The Chancellor, in the autumn statement, also announced the government’s intention to initiate consultations on consolidating remote gambling into a single tax, as opposed to the existing three-tax framework.
Chancellor Hunt’s plan involves the government consulting “shortly” on proposed changes to the structure of remote gambling taxation, defining it as “gambling offered over the internet, telephone, TV, and radio.”
The consultation aims to explore the elimination of the current three-tax structure, which comprises remote gaming duty, general betting duty, and pool betting duty.