Betfred has joined the likes of Evoke and Paddy Power to caution against a rumored tax hike due to be introduced during the November budget reading in the United Kingdom.
Long has been criticized by the industry; the potential tax increase could lead to diminished operational capabilities for UK and Irish gambling majors, forcing them to slash jobs and close physical locations.
High street shops may have to go if tax hike hits
However, Betfred is by far the only company to warn of the unprecedented ramifications of a tax increase. According to Fred Done, one of the most influential figures in gambling and the person to set up the company back in 1967, the company may need to shutter 1,287 shops.
This would have a far-reaching impact on employment, impacting 7,500 jobs in the process, with Done not mincing his words about what the measure could do to the industry, calling it the "biggest challenge" it has faced over the past decades.
Reeves has remained ambiguous about what she would do and whether she believed that a tax increase was indeed the right step forward. She has argued cautiously that there was merit in looking to raise the tax on the gambling industry, but has stopped short of making a clear commitment.
Done explained that it was not greed that motivated operators to warn against the tax increase, but simple arithmetic. Speaking to the BBC, he said:
"It doesn't even need to go up to 50%. If it went up to anywhere like 40% or even 35% there is no profit in the business. We would have to close it down. I'm talking job losses. We're talking probably 7,500."
Done said that out of all Betfred shops, 300 were not turning a profit, and that an increase to 35% tax would mean that a total of 430 properties would be affected. Similarly, he cautioned that once there are fewer options to bet with in the regulated market, people would turn to offshore alternatives.
20 more years of high street shops, should the tax remain unchanged
According to Done, once people make the switch to unregulated platforms, it would be harder to bring them back home, even though they would be gambling online, and the UK already has one of the world’s most developed iGaming markets.
Done, however, is not delusional about the future. He believes that people are migrating online and that this trend will continue. High street shops are a dying breed, but they need not be snuffed out at once. There are probably 20 more years of life in high street betting shops, Done believes – should things remain quiet on the taxation front at least.
