The UK government plans to raise Machine Games Duty by 25%, and the Betting and Gaming Council has responded with a sharp warning that the move would damage community venues and weaken the regulated market.
The Department for Culture, Media and Sport is making the announcement after a consultation period, with the increase due to take effect on 1 October. In a statement carried by inkl, the council said it “fundamentally oppose[s] any increase in Machine Games Duty and nothing in this report justifies such a damaging policy.”
The council said bingo clubs, betting shops, casinos, working men’s clubs and miners’ welfare clubs play an important role in communities across the country. It argued that higher duty would force venue closures, cost jobs and weaken high streets.
According to the council, the only beneficiaries would be the growing illegal gambling market. It said that market pays no tax, contributes nothing to local communities and offers none of the consumer protections found in the regulated sector.
The BGC said the regulated betting and gaming sector supports around 109,000 jobs and contributes billions to the UK economy. It also described the industry as providing valued leisure venues for millions of adults who gamble safely and responsibly.
A Treasury technical background paper explains that Machine Games Duty is charged on net takings, meaning stakes less prizes, from dutiable machine games. It says the standard rate is 20% and the lower rate is 5%.
The lower rate applies to machines with maximum stakes of 10 pence and maximum cash prizes of £8, while the standard rate covers other dutiable machines. The paper said the reform was expected to be broadly revenue-neutral, with the total impact on Exchequer revenues described as negligible.
That background paper also said the methodology behind the central estimate had been certified by the Office for Budget Responsibility. It gave an example for 2012/13 of about £225 million from Amusement Machine Licence Duty, £325 million from VAT and £550 million from Machine Games Duty.
The council said the report made no attempt to quantify the venue closures or job losses its proposal would cause. It also said the report’s own polling showed a majority of people, across the political spectrum, did not support increasing taxes on gaming machines.
