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 candid internal discussions among its senior staff. This development comes just ahead of Chancellor John Healey's Budget announcement on Wednesday, October 28, where an increase in MGD is anticipated.
The draft was unveiled on Tuesday by Guido Fawkes, a political news website known for sharing leaks that often embarrass lawmakers. It appears the document was inadvertently published with internal comments from staff included.
The report, titled "Addressing the Harm," was launched in June and proposes increasing MGD on Category B machines from 20% to 40%, a move that could raise between £275 million and £458 million annually. At the time of its launch, this proposal was covered extensively by iGB.
Within the draft, SMF director Theo Bertram questioned the authors' confidence in the notion that displaced workers would find new employment. Chief economist Gideon Salutin responded that while individual job security could not be guaranteed, overall employment on a national level was expected to rise and maintained that the wording in the report was accurate. On the subject of crime, Bertram cautioned against making unwarranted causal claims, leading Salutin to amend the language from causation to correlation. Salutin also acknowledged that the proposed tax increase would adversely affect bingo halls and seaside arcades, while dismissing concerns about a potential shift to illicit gambling.
Phrases regarding potential closures and job losses from the draft were retained in the final report, which refers to a correlation between machine gambling and gambling-related crime. At the time of publication, the SMF had not responded to requests for comment from iGB.
Industry reactions have been swift. Greg Knight, CEO of Jenningsbet, criticized the SMF on LinkedIn, declaring the think tank "totally discredited" and accusing it of using tax increases as a pretext for abolishing gambling. Carl Templeton-Smith, from CTS Retail & Equine Consulting, expressed concerns about policymakers depending on research without rigorous scrutiny, targeting the actions of MP Alex Ballinger, who led a letter from 90 Labour MPs advocating for the 40% tax rate and also penned the report's foreword.
Helen Walton, founder of G.Games, alleged that some involved in generating and disseminating this data know it lacks validity but choose to present it nonetheless.
The internal comments made public by Guido Fawkes highlight challenges to claims and rewording processes, though no fabricated figures were evident. Not all assertions withstand scrutiny—the published report concedes that closures could result in job losses in the sector, suggesting that rather than a total lack of evidence, the causal claims were softened.
In an environment where the SMF is pushing for higher taxes, the need for accuracy is critical, particularly given the British Gambling Commission's response, which indicated that the revealed internal comments prompt serious concerns about the evidential basis for further tax hikes.
As the industry braces for another potential blow, having already seen the Remote Gaming Duty rise to 40% in April, the British Gambling Commission warns that a 40% MGD rate could jeopardize up to 3,800 casino jobs, with Regulus Partners estimating that around 1,500 betting shops might close immediately. The British Horseracing Authority estimates that this could lead to a potential annual cost of £92 million for racing.
Reports suggest that Healey might propose a 25% increase, signaling a possible compromise. Regardless of the outcome, the comments uncovered provide critics of the SMF with new ammunition entering Budget week.
