Fred Done, who founded Betfred alongside his brother in 1967, said this would lead to around 7,500 job cuts
The co-founder and chairman of Betfred has warned all its 1,287 shops could shut for good if Chancellor Rachel Reeves hikes taxes on gambling firms.
Fred Done, who founded Betfred alongside his brother in 1967, said this would lead to around 7,500 job cuts. It comes after the Chancellor indicated that taxes on gambling could rise in the next Budget.
The Institute for Public Policy Research (IPPR) has proposed large increases in gambling taxes to raise an additional £3billion. This includes increasing taxes on online casinos from 21% to 50% and raising those on slots and gaming machines, from 20% to 50%.
The gambling sector is exempt from VAT, and winnings from gambling are also not taxed. In a recent interview with ITV News, Ms Reeves said: “I do think there’s a case for gambling firms to pay more.”
More than 100 Labour MPs have written to the Chancellor to urge her to hike gambling taxes, and then use the money to pay for scrapping the two-child benefit cap.
Mr Done told the BBC: “It [tax] 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.”
He said 300 of his shops were already losing money and warned a 5% increase on gambling taxes would see this number increase to 430.
Betfred has also written to Ms Reeves and culture secretary Lisa Nandy. In a letter seen by the Financial Times, the firm warned that increasing tax “would produce the opposite of their intended effect: reducing tax revenue, [and] accelerating black market growth”.
Similar warnings have also been issued by Flutter, which owns Paddy Power and Sky Bet, and William Hill parent company Evoke.
Sebastian Butterworth, Director of Racing Strategy at Flutter UKI, said: “Any increase in gambling tax will have a profound effect on funding for racing – be that a rise in betting duty or a tax raid on people who play games like online bingo and poker.
“We are already having to reconsider certain investments in UK racing, and we urge the Government to reconsider.”
A spokesperson for Evoke said: “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.”
