Fred Done, the 83-year-old founder of Betfred and the highest taxpayer in Britain for this fiscal year, has issued a dire warning regarding potential tax increases for the gambling industry.
In a recent interview with the Financial Times, Done expressed that any further tax hikes could lead to the widespread closure of betting shops, negatively affect surrounding industries like horse racing, and exacerbate the decline of high street retail.
Currently, Betfred operates around 1,094 retail locations across the UK, with Done emphasizing the significant risks associated with proposed changes to the Machine Gaming Duty (MGD). This tax on gambling machines may rise from 20% to 40%, a change being considered by Chancellor John Healey as part of the forthcoming Autumn Budget.
The retail sector of Betfred substantially relies on fixed-odds betting terminals (FOBTs) and in-store gambling. Despite the stake limit on FOBTs being reduced to £2 in 2019, these machines still contribute approximately half of Betfred’s shop profits. Done indicated that without FOBTs, operating retail betting would become “impossible.”
Done's concerns extend to the broader implications of such tax increases. He predicts that Betfred would be forced to shut down 495 shops within a year if the MGD were to double, resulting in 2,575 job losses and an estimated £67 million in lost tax revenue for the government.
So far this year, Betfred has already closed 132 shops following last year’s increase in the Remote Gambling Duty.
Chief Executive Jo Whittaker stated, "We have tried hard to protect all our sites and the colleagues who work in them, but the combined impact of higher employer National Insurance contributions, wage inflation, increases in gambling taxes, and wider economic uncertainty has left us with no choice".
Evoke also shut down 200 of its William Hill stores earlier this April due to similar pressures.
Stella David, CEO of Entain, has also voiced concerns about the potential rise in MGD, projecting that it could increase operational costs by £100 million should the policy be enacted. In a letter to the UK Prime Minister last week, David highlighted how such tax increases would adversely affect high street workers and local communities, stating, "They are people losing their jobs and communities losing long-established high-street businesses."
Done illustrated these closures as indicative of a wider trend toward the decline of high street retail, predicting that by 2030, betting shops may completely vanish. "I believe that by 2030 we will have no betting shops. The high street will be dead. We’ve already worked it out that with the increases in taxes and salaries and other wages it won’t be worth operating,” he remarked.
Betfred continues to sponsor Britain’s five classic horse races, including the prestigious Epsom Derby. However, Done mentioned that the company has not yet committed to extending its sponsorships in light of the tax uncertainties, warning that tighter regulations could drive problem gamblers to unregulated markets.
He challenged claims from Dame Meg Hillier, the chair of the Treasury Select Committee, who has suggested that industry warnings amount to “scaremongering.”
Local policymaker Burnham recently introduced further challenges for the retail sector by proposing the removal of the "aim to permit" for betting shops and mandating that adult gaming centres must obtain planning permission to operate.
Done questioned the extent of the tax burden affluent business owners should shoulder, asking, “They keep saying those with the broadest shoulders should be paying more tax. Well, how broad do my shoulders have to be? We paid £400 million in taxes as a family last year.”
Though Done personally is reluctant to leave the UK, he acknowledged that his children may consider relocating to countries with more favorable tax laws.
