The Social Market Foundation (SMF), a think tank advocating for the doubling of Machine Games Duty (MGD), is facing scrutiny after a draft of its key report was leaked online, revealing internal discussions among its senior staff. The leak comes just ahead of Chancellor John Healey's Budget presentation on Wednesday, October 28, when an increase in MGD is anticipated.
Guido Fawkes, a political news website known for its leaks, published the draft on Tuesday, exposing various staff comments alongside the report. This document, titled "Addressing the harm," argues for raising the MGD on Category B machines from 20% to 40%, projecting a potential annual revenue increase of £275 million to £458 million.
In the draft, SMF director Theo Bertram questioned the authors' basis for claiming that workers impacted by potential job losses would find new employment. Chief economist Gideon Salutin acknowledged there was no certainty for individual workers but insisted that overall employment would increase. He held firm on the report's wording despite Bertram's concerns.
On crime, Bertram cautioned colleagues against overstating the relationship between MGD and gambling-related crime. Salutin amended the language from a causal assertion to a note of correlation, conceding that the tax could adversely affect bingo halls and seaside arcades while downplaying the likelihood of a black market rise.
Quoted phrases from the draft regarding closures and job losses were also present in the final report, which asserts a correlation between machines and gambling-related crime. As of publication, the SMF had not responded to requests for comment.
Industry responses were swift following the leak. Greg Knight, CEO of Jenningsbet, lambasted the SMF, stating on LinkedIn that the organization has been "totally discredited," accusing it of using taxation as a pretext for eliminating gambling. Carl Templeton-Smith of CTS Retail & Equine Consulting criticized policymakers for relying on unverified research.
Helen Walton, the founder of G.Games, suggested that some involved in the data production might be aware of its questionable nature but still presented it as legitimate. The internal comments, while showing challenges to claims, did not indicate fabrication of figures.
The published report itself acknowledges that industry closures could lead to job losses. The draft refined its claims, softening language rather than admitting a lack of evidence. The British Gambling Commission echoed concerns about the integrity of the evidence supporting proposed tax increases.
As the industry prepares for another potential hit in the Budget, the BGC anticipates that a 40% MGD could jeopardize up to 3,800 jobs in casinos. Estimates suggest approximately 1,500 betting shops could shut down, costing the racing sector an estimated £92 million annually. Initial reports indicate that Healey might consider setting the MGD rate at 25% instead of 40%. Regardless, the SMF's critics are now armed with new material as they approach the Budget discussions.
