Betfred Warns of Shop Closures Amid Proposed Tax Increase

Betfred, one of the UK’s leading bookmakers, has raised alarms over the potential closure of nearly 1,300 betting shops due to a proposed increase in gambling taxes. This move could jeopardize approximately 7,000 jobs across the country, according to the company’s chairman and co-founder, Fred Done. He emphasized that this situation represents the “biggest threat” the gambling industry has ever faced.

The proposed tax hike was initially suggested to Chancellor Rachel Reeves by former Prime Minister Gordon Brown as a measure to combat child poverty. The Betting and Gaming Council, which represents various gambling companies, has labeled Brown’s plan as “economically reckless.” They caution that such an increase could lead to a rise in black market gambling activities.

In an interview, Done expressed concerns about the financial viability of many Betfred shops, noting that a significant number are already operating at a loss. He indicated that an increase in taxes would exacerbate these financial difficulties. Betfred’s latest annual report revealed profits of £1 billion; however, half of that amount was allocated to cover operating expenses.

Industry Reactions and Consequences

The proposed tax increase has sparked widespread concern within the gambling sector. Estimates from the Institute for Public Policy Research (IPPR) suggest that a near 50% rise in gambling taxes could generate approximately £3.2 billion in revenue. In response, Evoke, the owner of William Hill, warned that they may close up to 200 shops if the new tax is implemented. Similarly, rival bookmaker Paddy Power has announced plans to shut over 50 shops in the UK and Ireland, potentially affecting 250 employees.

The betting company Entain has also indicated that they may resort to closures in light of the proposed tax. Done shared his perspective on the future of gambling, stating, “Slowly it will go online, but we’re talking, without tax increases, we’ve still got probably 20 years of life on the High Street.”

Financial Pressures and Next Steps

The UK government is facing significant pressure to secure £50 billion for public finances, intensifying scrutiny on Chancellor Reeves as the Autumn Budget approaches. There is growing speculation about how this budget will address the financial concerns of various sectors, including gambling.

Professor Ashwin Kumar, the director of Research and Policy at the IPPR, supports the argument for higher gambling taxes. He stated, “We know that most of the profits made by gambling companies come from a very small number of gamblers, many of whom are at risk of serious harm. And so we think that the duties should be higher, just like tobacco and alcohol.”

Additionally, the charity GambleAware has advocated for “further regulation” to protect vulnerable populations, particularly children, from the potential harms associated with gambling.

As discussions surrounding the proposed tax continue, the future of the betting industry in the UK remains uncertain, with companies like Betfred facing critical decisions that could reshape their operations and workforce.