The decision to freeze Gaming Duty Bands, initially announced in March, is sparking apprehension within the gaming industry. Industry insiders estimate that this freeze could lead to a substantial £5 million ($6.3 million) annual tax increase for members of the Betting and Gaming Council (BGC) operating land-based casinos in the UK.
Challenges Faced by the Industry:
The Treasury’s decision to maintain the status quo on Gaming Duty Bands, without adjusting for inflation, comes at a challenging time for the sector. Rising wages, soaring energy costs, and high inflation rates have created a difficult operating environment for casinos. BGC CEO Michael Dugher has expressed deep concern over the freeze, labeling it a “stealth tax” with the potential to impede recovery and weaken future growth.
Financial Impact on Casinos:
The freeze on Gaming Duty Bands is anticipated to cost casinos a staggering £25 million over the next five years. BGC members, representing over 90% of the regulated betting and gaming industry in the UK, contribute significantly to the economy, generating £7.1 billion in revenue and supporting 110,000 jobs. Dugher stresses that the removal of the freeze could have provided a much-needed boost to the land-based casino sector.
Advocacy for Reevaluation:
Michael Dugher has called for a reevaluation of the freeze, emphasizing that maintaining the status quo represents a missed opportunity for companies ready to generate jobs and investment across the country. The BGC remains committed to collaborating closely with the government and regulators to deliver the White Paper outlining the industry’s future.
Industry’s Commitment and Concerns:
While advocating for a fair evaluation, the BGC also raises concerns about the potential consequences of any changes. There is a worry that alterations might drive customers towards the unsafe, unregulated gambling black market. Recent years have witnessed a doubling of betting numbers in this illicit market, with transactions reaching staggering amounts in the billions.
The freeze on Gaming Duty Bands in the UK has become a point of contention, with the BGC highlighting the potential adverse effects on the land-based casino sector. As the industry faces a myriad of challenges, including economic uncertainties and escalating operational costs, the plea for a reevaluation underscores the need for a balanced approach. The financial impact on casinos, coupled with the sector’s significant contribution to the economy and job market, reinforces the importance of carefully considering the potential ramifications of tax-related decisions on the broader gaming landscape.