In a recent panel discussion at the Hippodrome Casino in London, leaders from the UK’s casino industry expressed serious concerns about potential changes to machine games duty (MGD) that may hinder further investment and jeopardize jobs. These remarks came amid broader economic pressures the sector is facing while attempting to modernize.
Richard Harris, CEO of Rank Group, pointed out that a combination of increased taxation, tighter regulations, and rising operational costs has already led to the closure of four venues over the past four and a half years. He characterized the current financial landscape as challenging, especially due to escalating taxes and a stricter regulatory environment, which have strained profitability and cash flow.
Harris noted that even speculation regarding higher taxes has already affected investment decisions significantly. Paul Willcock, COO of Genting Casinos, echoed this sentiment, stating that the potential increase in MGD from 20% to 40% is a cause for concern. This proposal, which emerged from the Social Market Foundation a few months ago, could be part of the government’s upcoming autumn budget.
The gaming sector has vigorously opposed the MGD hike, arguing that such an increase would have adverse effects on their retail operations. Fred Done, owner of Betfred, warned in September that a tax increase could force his company to shut down 495 shops within a year, resulting in the loss of 2,575 jobs and potentially reducing tax revenues by approximately £67 million for the Exchequer.
Willcock told the audience that a stable regulatory and fiscal environment is crucial for encouraging investment: "If we can get some relaxation or at least certainty on that, then investment will flow." He highlighted Genting’s readiness to expand in the UK, noting the company’s substantial global investments, including $5 billion spent on the Las Vegas Strip, alongside investments in New York and Singapore.
The executive chairman of the Hippodrome, Simon Thomas, stressed the importance of stability in the regulatory and financial environment for operators looking to invest typically over a three to seven-year horizon. He supported Harris’s assertion that profits are essential for future investments.
The panel expressed optimism regarding the Gambling Commission's 2025 land-based modernization reforms, which have increased the number of slot machines allowed in casinos from 20 to up to 80 and eased ancillary betting rules. Harris mentioned that Rank Group has expanded its machine count from 1,400 to 2,250, a 65% increase, investing £15 million in one venue driven by these reforms.
However, panelists cautioned that these reforms take time to take hold and underscored the need for a stable tax environment alongside regulatory changes for the sector to thrive. Dan Waugh, a partner at Regulus Partners, raised a critical question on whether these reforms will improve customer experience and attract a broader audience.
The panel anticipated a planned investment pipeline of approximately £200 million in the coming years for the casino sector. Michael Kill, CEO of the Night Time Industries Association, highlighted the potential positive impacts of sustained casino investment on the economy, including benefits to local high streets, night-time economies, job creation, and supply chains. A report by the NTIA revealed that 58% of respondents identified casinos as their primary reason for visiting an area, with 55% stating they likely would not have visited without the casino's presence.
Notably, if the MGD increase goes through, job losses could approach 3,800 nationwide. A survey of 23 operators indicated that 95.7% would reduce staffing levels, while 91.3% would cut investments in their venues, with 60.9% possibly needing to close a venue completely.
Panelists also highlighted the role of casinos in local communities. Willcock pointed out that Genting employs around 3,500 people in the UK and maintains comprehensive training programs. He noted that new hires undergo rigorous training before working at casino tables.
Both Kill and Waugh emphasized the broader social benefits of casinos, such as contributing to safer perceptions in town centers at night and hosting community meetings. Kill remarked, "People coming after midnight actually felt safe because of the service levels, because of the engagement, the lighting, etc."
The panel unanimously urged the government to refrain from imposing immediate additional tax increases while allowing the 2025 reforms to take root. Kill advocated for a "chance to bed in" these reforms and recognition of casinos as integral contributors to a 24-hour economy. Willcock and Harris stressed that a clear and enduring fiscal framework could lead to significant investments in the sector. Waugh warned against overly stringent regulations influenced by public health concerns, advocating instead for a balanced approach that safeguards consumers while fostering sustainable business growth. Recent analyses by Regulus indicated that the horse racing industry could lose about a third of its annual revenue—approximately £92 million—should the duty increase proceed.
