Betfred founder Fred Done has warned that he would be forced to close ALL of his high street betting shops if the chancellor, Rachel Reeves, hikes gambling tax in next month’s autumn budget.
That would amount to as many as 1,287 closures, with around 7,500 jobs at risk.
Done labelled the prospect of a tax raid as the ‘biggest threat’ to the betting sector he has seen in nearly 60 years as the Betfred supremo.
No Profit in the Business
It would be a monumental moment if Betfred, founded in 1967 by Fred Done and his brother Peter, disappeared from the UK high street.
But speaking to the BBC, Done warned that if remote gaming tax went up to 35% or higher there would be ‘no profit in the business.’
“We would have to close it down,” Done admitted.
“I’m talking job losses. We’re talking probably 7,500.”
Even at the current levels of taxation, the Betfred founder confirmed that around 25% of his betting shops run at a loss. If duty is increased to anticipated levels, that number would jump to around 35% of loss-making properties – hence the mass closures.
It’s expected that the current tax regime, which sees general betting duty charged at 15% and remote gaming at 21%, will be overhauled by the chancellor when she announces her Autumn Budget in November.
Reeves has already spoken of a ‘harmonisation’ of gambling tax, which would see all firms pay the same amount irrespective of the products that they offer – even in the very best case scenario, that would see bookmakers facing a rise of 6% in taxes paid on their profits.
But it’s likely that the harmonised rate will be higher than 21%, with forecasters predicting a hike to 30-35%. One influential think tank with links to Parliament has even called for remote gaming tax to be increased to an unsustainable 50%.
Alongside the loss of profits to the taxman, many betting firms are already paying up their share of other government measures – which include an increase in National Insurance Contributions and the national minimum wage, which Done calculates has seen Betfred’s profits hit by an extra £20 million a year in costs.
As noted, even a rise in tax to 35% would be catastrophic for the UK gambling industry… and perhaps spell the end of high street betting shops altogether.
“Once the [UK] industry is closed down, it’s gone,” he said.
“People will still bet, but they’ll bet offshore with it. There’s plenty of bookmakers offshore who happen to take the bets, who don’t pay anything to this country.”
Facing the Consequences
It would seem that far from sensationalising the situation, Done’s words are simply reflective of the views of many of his competitors in the UK market.
Paddy Power have announced plans to close 57 high street betting shops within a month in the UK and Ireland, with 250 jobs at risk – the firm hopes that most, if not all, of those affected will be redeployed elsewhere.
Although a spokesperson for the firm didn’t cite the expected tax hike as a factor, they did reveal that ‘cost pressures’ and ‘challenging market conditions’ were the main factors behind the decision.
Elsewhere, Entain CEO Stella David – whose firm operates a number of Coral and Ladbrokes shops up and down the country – warned that shop closures would be an inevitable outcome of any tax raid.
“If the UK becomes uncompetitive, there are other markets we can pivot to,” David said.
“Every point of tax increase has a consequence… certain shops become unviable, and the scale depends on how far it goes.”
At the time of writing, Entain – who are already one of the highest tax-payers in the country – has 2,300 high street betting shops in the UK, employing more than 10,000 people.
Meanwhile Evoke, who seized the operation of William Hill’s high street shops back in 2022 following a takeover, has predicted that as many as 200 of the retail properties that they purchased just three years ago would have to close should taxes rise significantly.
Their spokesperson commented:
“We are mindful of potential tax increases in the forthcoming budget which would impact investment in the UK and drive more customers to the black market.
“As part of our ongoing planning, we are assessing the potential impact of different overall tax scenarios on our UK operations. This includes the difficult but necessary consideration for shop closures.”