At a panel discussion on Wednesday, industry leaders from the UK’s casino sector voiced serious concerns over a potential doubling of machine games duty (MGD), emphasizing that increased taxation alongside current economic challenges could hinder investment and threaten jobs in the industry. The event took place at the Hippodrome Casino in London, featuring executives from major operators including Rank Group and Genting Casinos, alongside members of the Night Time Industries Association (NTIA) and the consultancy Regulus Partners.
Richard Harris, CEO of Rank Group, highlighted the negative impact of rising operational costs, tighter regulations, and tax increases, noting that his company has closed four venues in just four and a half years. He specifically pointed out that these closures stem from a demanding financial landscape characterized by increased operating expenses and stricter regulations, which have significantly strained profitability.
Concerns about the tax environment were echoed by Paul Willcock, COO of Genting Casinos, who suggested the looming MGD increase from 20% to 40% has kept industry leaders “awake at night.” This proposal, initially brought forward by the thinktank the Social Market Foundation earlier this year, has raised alarms that it may feature in the upcoming autumn budget by the government.
The industry has united in its opposition to this proposal, warning it could spell disaster for retail businesses. Fred Done, owner of Betfred, previously stated that such a tax increase could see his company close 495 shops within a year, leading to the loss of over 2,500 jobs and a potential shortfall of £67 million in tax revenue for the Exchequer.
Willcock called for clarity on tax policy, positing that stability would encourage investment. He drew attention to Genting’s significant global investment of $5 billion on the Las Vegas Strip, alongside similar investments in New York and Singapore, underscoring the company’s eagerness to invest in the UK should the fiscal and regulatory environment stabilize.
The discussion highlighted the need for assurance regarding the stability of “playing conditions” and fiscal regulations. Simon Thomas, executive chairman of the Hippodrome, stressed that operators require a reliable framework over three to seven-year investment timelines to effectively generate and deploy profits.
Amid these challenges, the panel acknowledged the positive strides being made through the Gambling Commission’s land-based modernisation reforms expected by 2025, which will increase the number of slot machines in casinos and relax certain betting regulations. Rank Group has already expanded its machine estate from 1,400 to 2,250 machines and invested £15 million in a single venue thanks to these reforms.
However, industry leaders insisted that the full benefits of these changes will take time to materialize, and they emphasized the need for tax stability to accompany regulatory easing. Dan Waugh, a partner at Regulus Partners, questioned whether the reforms provide a more appealing experience for customers, highlighting the importance of evaluating their impact on customer satisfaction and attraction.
The casino sector is ready to invest around £200 million over the coming years. Michael Kill, CEO of the NTIA, noted the broader economic benefits that can stem from sustained investment in casinos, which support jobs, local economies, and supply chains. A recent survey indicated that 58% of responders recognized casinos as primary attractions to areas, while 55% admitted they might not visit those areas without the casinos.
Kill’s report cautioned that if the MGD were to rise, the sector could face approximately 3,800 job losses across direct and indirect roles. Data compiled from 23 operators showed that 95.7% would likely reduce staffing levels and 91.3% would decrease investment in venues due to tax increases, with 60.9% potentially forced to shut down venues altogether.
Representatives from various companies reiterated casinos’ significance as major employers and community contributors. Willcock mentioned that Genting alone employs about 3,500 people in the UK and emphasized the comprehensive training programs for staff, including six weeks of training before staff can engage with customers at the table.
Kill and Waugh highlighted that casinos can enhance perceptions of safety during late-night hours and serve as venues for community gatherings. Kill pointed out that patrons visiting after midnight tend to feel safe due to the service levels and ambiance provided by casinos.
The panel urged the government to allow the 2025 reforms a chance to succeed without immediate tax hikes, advocating for recognition of casinos as crucial components of a vibrant hospitality sector that supports extended economies. Call for a consistent fiscal environment was a shared sentiment, with both Willcock and Harris expressing that clarity in tax policy would foster the conditions needed for significant investment.
Waugh warned against policies driven solely by public health perspectives, calling for balanced regulations that ensure consumer protection while promoting sustainable business growth. A recent analysis by Regulus suggested that the horse racing sector could face a loss of £92 million, representing around one third of annual revenue, should the proposed MGD increases go ahead.
