Betfred says all its shops may close if Reeves hikes gambling tax

1,287 Betfred stores could disappear from Britain’s High Street if Chancellor Rachel Reeves raises taxes on gambling firms, the company’s co-founder and chairman told the BBC.

Fred Done, who founded Betfred with his brother in 1967, said a closure of this size would put 7,500 jobs at risk.

The billionaire businessman said tax increases were the “biggest threat” to the sector in 57 years. It echoes similar warnings from other gambling brands.

In the budget, it was suggested to the chancellor to increase the taxes applied to betting companies. He told ITV recently: “I think there’s a case for gambling firms paying more… they should pay their fair share of taxes and we’ll make sure that happens.”

Reeves was Encouraged by former Prime Minister Gordon Brown Increasing taxes on the gambling industry and using the revenue from this to reduce child poverty.

The Institute for Public Policy Research (IPPR) think tank has estimated that additional taxes of up to 50% imposed on the sector over the summer could raise £3.2bn.

At the time, the Betting and Gaming Council, which represents gambling companies, described Brown’s plan as “economically reckless” and said it would push gamblers into the black market.

Betting companies have resisted calls to increase taxes. Owner Evoke said earlier this month that up to 200 William Hill retail locations could close if the industry faces higher taxes.

Betfred’s Mr Done warns if taxes on UK gambling companies increase it would also have to close its High Street stores.

“IT [tax] It doesn’t even need to go up to 50%. Even if it goes up to 40 percent or even 35 percent, the business will not make any profit. We would have to close. I’m talking about job losses. “We’re probably talking about 7,500,” he said.

He said 300 of his shops were “currently making a loss” and claimed a 5 per cent increase in gambling taxes would take that number to 430.

“Once [UK] The industry closed and left. People will still bet, but with this they will bet offshore. “There are many bettors who place bets abroad and do not pay anything to this country,” he said.

Punters’ winnings from gambling are not taxed in the UK and no VAT is charged on bets. But the gambling industry pays extra taxes, including:

• 21% tax on online casino game bets
• 20% customs tax on slots and gaming machines
• General betting tax on sports fixtures is 15%
• General betting tax on horse racing is 25%

Mr Done said recent increases in employer National Insurance Contributions (NICs) and the minimum wage had already added £20 million to the company’s costs.

He acknowledged that, as with banking or buying clothes, customers were increasingly turning to the internet, making the closure of betting shops inevitable.

Rival firm Paddy Power said it would do so on Thursday Close 57 stores across the UK and Republic of IrelandDue to increasing cost pressures and challenging market conditions.

“It will slowly come online, but we are talking about probably 20 years of life on the High Street without tax increases,” Mr Done said.

“And you know, huge parts of the High Street in the UK are being destroyed by closures.”

Betfred generated revenue of around £1bn in its latest annual results, but made an operating profit of just £500,000 following a series of write-downs on its assets.

The family-owned company has bases in the UK, Gibraltar, USA and South Africa and invests in both online gambling and High Street sports betting.

Critics point to the social and financial harm that gambling causes. 2023 forecast from Office for Health Improvement and Disparities research Excess costs of harmful gambling between £1bn and £1.77bn.

Prof Ashwin Kumar, director of research and policy at IPPR, said higher taxes were needed on the industry, particularly on online betting, to reflect the negative consequences of gambling on some people.

“We know that most of the profits made by gambling companies come from a very small number of gamblers, many of whom face serious risk of harm. That’s why we think taxes should be higher, just like tobacco and alcohol.”

Charity GambleAware, which supports people with gambling addictions, said “more regulation” of advertising was needed to help protect children and young people, as well as raise awareness of the risks.

But Mr Done argues UK-based High Street betting shops offer better protection It has advantages over online and overseas competitors for people with gambling problems and tax revenue.

Asked whether his call to keep taxes as they are would win the Chancellor’s support, Mr Done said: “We are 10 to one,” meaning many betting shops are likely to close.

An HM Treasury spokesman said: “We do not comment on speculation about future changes to tax policy.”