Betfred founder Fred Done has proclaimed that the high street betting shop will be ‘dead’ in the UK by 2030 if the government continues with its anti-gambling tax crusade.
The 83-year-old, who founded Betfred six decades ago, has warned that he will have to close nearly 500 shops if the Chancellor, John Healey, hikes Machine Games Duty as expected in his Autumn Budget.
And that, allied to the other operational challenges that bookmakers are facing, could lead to the complete death of the betting shop within the next three years, acorn to Done.
Machine Games Duty Grab
The Prime Minister, Andy Burnham, has made no secret of his opposition to Adult Gaming Centres, the 24/7 gambling venues that house slots and other ‘machine games’ for their players.
Currently, those machines are taxed at 20% of profits. But Burnham, via his right-hand man Healey, wants to rid the UK high street of Adult Gaming Centres – which he has described as ‘dodgy businesses’ – by hiking the tax paid, known as Machine Games Duty (MGD), to 40%.
Unfortunately, the games machines are also found in betting shops and other establishments like bingo halls, so they will face yet more of a tax burden – at a time when the duty paid on online casino games has already been doubled.
And next year, in April 2027, the amount of tax paid by operators on the profits generated from online sports bets will increase from 15% to 25%.
Those financial pressures, allied to a transition to online sports betting and a reduction in foot-fall on the high street, could lead to the decimation of the betting shop.
“I believe that by 2030 we will have no betting shops,” Fred Done told the Financial Times.
“The high street will be dead; we’ve already worked it out that with the increases in taxes and salaries and other wages, it won’t be worth operating.”
Done also warned that an absence of betting shops could push more punters to the black market, while separate research from intelligence agency EY – commissioned by the Betting and Gaming Council – modelled that nearly 1,500 betting shops would be forced to close by a doubling of MGD… at a loss of almost 16,000 jobs.
Stella David, the CEO of Entain, has written to Burnham cautioning against a doubling of MGD. She claims that doing so will add £100 million a year in costs to firms like Entain, making it financially unfeasible to operate betting shops in the UK.
The loss of 16,000 jobs, as well as the millions lost that would otherwise be paid into the Treasury, is not the most sensible of governance, it’s fair to say.
Pulling the Plug
Betfred have already closed more than 130 betting shops this year, with any MGD hike likely to push that number above 600.
Thousands of people have been made unemployed, while other firms – such as Entain – have made redundancies too across operations, trading and customer support.
There are other ramifications to increasing MGD, no matter how unwitting they might be. Each betting shop pays in the region of £70,000 a year into horse racing to be able to broadcast live races on their big screens.
The closure of thousands of shops in 2027, which could be a reality if Healey ploughs ahead with the next gambling tax grab, would see millions wiped from horse racing’s finances.
Prize money will fall and the amount being donated to equine welfare will also be cut.
Betting firms are already tightening their belts in anticipation of an even more challenging future, with Entain amongst those that have ended their commercial agreements with sporting events and major horse racing meetings.
And Done has also been forced to act, ending his near decade-long association with Super League and Challenge Cup rugby.
The CEO of the Rugby Football League, Rhodri Jones, commented:
“Betfred have been an outstanding partner across rugby league for nearly a decade.
“We are extremely grateful to Fred Done and the entire Betfred team for their backing, passion and dedication to our sport.”
And that’s unlikely to be the end of the cull, with Betfred also contemplating ending their lucrative sponsorship of British Flat racing’s Classics, which include the 1,000 Guineas and the Epsom Derby.
“We have a verbal agreement to renew our sponsorship of the British Classic horse races for a further three years. But if October’s budget goes the wrong way on MGD, we will have to walk away from those, too,” Done warned.