A proposed UK tax increase exposes an awkward policy tradeoff: charging more for high-street slot-machine revenue could recover more of gambling’s public cost, but it may also accelerate the shift from staffed betting shops toward lightly staffed, round-the-clock slot venues. Rob Davies examines both the gambling industry’s closure warnings and the market structure behind them.
The Social Market Foundation wants machine games duty doubled from 20% to 40%. It estimates that the change could raise £275 million to £460 million a year, in addition to roughly £610 million collected last year. The Betting and Gaming Council commissioned an EY study projecting the opposite result: as many as 1,470 betting-shop closures, 15,900 lost jobs and a £120 million net loss to the Treasury.
Those forecasts come from interested parties and should be read accordingly. Betfred owner Fred Done says the increase would force him to close 495 shops and eliminate 2,475 jobs. Davies notes that Betfred has repeatedly made similar warnings: since 2019, it has threatened nearly 1,000 closures in response to taxes or regulation that largely took effect, while its estate declined by about 330 shops. During the same period, online gambling grew and the Done family continued taking large dividends.
That history does not mean a higher tax would have no effect. Betting shops, casinos and bingo halls carry staffing and property costs, and several operators have already announced cuts after an earlier duty increase. The uncertainty is how much retrenchment is caused by tax rather than the industry’s migration online, automation or ordinary cost cutting. Bet365, for example, attributed planned job losses partly to taxes while increasing its use of AI before the tax change.
The more consequential question is which businesses replace any shops that close. Adult gaming centres have lower overheads and looser operating constraints than casinos and bingo halls. Their annual takings rose from £528 million to £613 million as operators put more machines into larger premises. Merkur has offered to buy some of the 132 shops Betfred already put up for sale, suggesting that the 24-hour slot-centre segment expects to withstand the proposed duty.
A tax aimed partly at reducing the spread of slot machines could therefore consolidate the sector around the operators best equipped to run them continuously. The industry’s job-loss claims deserve scrutiny, but dismissing them as a bluff is not enough. The burden depends on the policy’s design: whether it merely raises the price of machine revenue, or also prevents lower-overhead slot farms from occupying the space left behind.