Fred Done, the 83-year-old founder of Betfred and the highest taxpayer in Britain this year, has raised alarms regarding the potential repercussions of tax increases on the gambling sector. In an interview with the Financial Times, he warned that further tax hikes could lead to significant closures of betting shops, adversely affect industries like horse racing, and hasten the decline of retail on high streets.
Betfred operates around 1,094 retail outlets throughout the UK. Done underscored the risks associated with the proposed increase of Machine Gaming Duty — which taxes gambling machines — from 20% to 40%, a change under consideration by Chancellor John Healey in the upcoming Autumn Budget.
The firm’s retail operations significantly rely on fixed-odds betting terminals (FOBTs) and in-store gambling. Despite the maximum stake for FOBTs being reduced to £2 in 2019, these machines still generate nearly half of Betfred’s shop profits. Done stated that without FOBTs, retail betting could become unsustainable.
If the tax increase is implemented, Done estimates that Betfred would need to close 495 shops within a year, resulting in 2,575 job losses and approximately £67 million in tax revenue lost for the Exchequer. The company has already closed 132 outlets this year, a decision made after a rise in remote gaming duty the previous year.
Jo Whittaker, Chief Executive, remarked at the time of the closures, "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." Similarly, Evoke shuttered 200 William Hill locations in April for comparable reasons.
Stella David, CEO of Entain, has echoed these concerns, predicting that a rise in the MGD could increase operational costs by £100 million if implemented. In a recent letter to the Prime Minister, she highlighted the damaging impact of such tax hikes on local workers and communities.
Done foresees these closures as indicative of a larger trend affecting high street retail. He predicted that by 2030, betting shops might vanish entirely, stating, "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."
Betfred currently sponsors several major horse races in Britain, including the Epsom Derby, but Done mentioned that the company has not yet renewed these sponsorships amidst ongoing tax uncertainties. He cautioned that a decline in regulated gambling could push problem gamblers towards illegal markets.
Furthermore, Done responded to criticisms from Dame Meg Hillier, chair of the Treasury Select Committee, who dismissed industry concerns as “scaremongering.”
Recent tax policies from Burnham have also presented challenges to the retail sector, as he aims to eliminate the “aim to permit” for betting shops and mandates that adult gaming centres now require planning permission to operate.
Done questioned how much more the wealthy should be taxed in the UK, saying, “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.”
While he expressed a personal disinclination to leave the UK, Done acknowledged that his children might consider moving to places with more favorable tax policies.
