Betfred Chairman Warns of Shop Closures Amid Tax Increase Threat

The UK bookmaker Betfred has issued a stark warning regarding the potential closure of its approximately 1,300 betting shops due to a proposed increase in gambling taxes. The chairman and co-founder of Betfred, Fred Done, indicated that this tax change could jeopardize the jobs of over 7,000 employees within the company. He characterized the looming tax hike as the “biggest threat” the gambling industry has ever encountered.

This warning has garnered support from other industry leaders who share concerns about the financial implications of the proposed legislation. The suggestion for a gambling tax increase originated from former Prime Minister Gordon Brown, who presented it to Chancellor Rachel Reeves as a measure aimed at reducing child poverty. However, the Betting and Gaming Council, which represents various gambling companies, has criticized the proposal as “economically reckless.” They have cautioned that such a tax increase could drive more gambling activities into the black market.

The financial health of Betfred has come under scrutiny, with Done highlighting that a significant portion of his shops are struggling to remain profitable. He underscored that an increase in taxes would exacerbate the existing financial challenges. Betfred’s most recent annual report revealed a profit of £1 billion, but half of that amount was allocated to cover operating costs, raising concerns about the company’s sustainability.

Industry Impact and Competitor Responses

Many gambling firms are voicing their apprehensions regarding the proposed tax changes. Research conducted by the Institute for Public Policy Research (IPPR) estimates that a nearly 50% increase in gambling taxes could yield up to £3.2 billion in revenue. However, this projection is met with skepticism from industry leaders. The owner of William Hill, Evoke, has warned that the company may need to close around 200 shops if the tax is implemented.

In a similar vein, rival firm Paddy Power has announced plans to shut down over 50 locations across the UK and Ireland, potentially impacting around 250 jobs. Additionally, Entain, another major player in the sector, has indicated that it too may have to consider shop closures should the new tax become law.

Looking towards the future, Done expressed his views on the evolving landscape 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.”

Budget Pressures and Regulatory Discussions

The proposed tax increase comes at a time when the UK government is facing significant public finance challenges, with a need for £50 billion to be addressed. This situation has placed immense pressure on Chancellor Reeves as she prepares for the upcoming Autumn Budget.

Professor Ashwin Kumar, the director of Research and Policy at the IPPR, commented on the necessity of higher gambling taxes. He highlighted that the majority of profits made by gambling companies come from a small number of gamblers, many of whom are at risk of serious harm. He advocates for increased duties similar to those imposed on tobacco and alcohol.

Charity organization GambleAware has also called for stricter regulations to mitigate the risks associated with gambling, particularly for vulnerable populations and children. The ongoing discussions about the gambling tax reflect broader concerns about public health and the financial sustainability of the gambling industry in the UK.

As the situation develops, the industry watches closely, weighing the impacts of potential new regulations against the backdrop of an economic landscape that continues to evolve.