Article by Milan Welsh
The high-street bookmaker is a staple of many British towns, especially in the Midlands.
From Birmingham to Derby, high streets have faced a plethora of challenges and have seen a significant decline in the last decade.
The new Labour government has attempted to balance a rapidly increasing in-tray since its arrival in July 2024 and two – the high-street decline and depleted treasury coffers – are coming to a head in the autumn budget.
A Balancing Act: High-Street Decline and Deficits
A looming tax overhaul in the highly anticipated budget designed to boost the finances of the country has ignited widespread warnings from the betting industry of betting shop closures, potentially costing thousands of jobs and delivering a devastating blow to the region’s retail landscape.
As the industry grapples with a number of issues typical to customer-facing industries, like the rise of digital platforms, lower footfall and the rise of new UK online casinos changing the market, a perfect storm was already brewing.
Add in a transformed tax landscape and heavy debt, and the future of physical betting shops is looking more and more precarious.
Chancellor Rachel Reeves is set to unveil one of the most highly anticipated budgets of recent generations on November 26th, and the gambling sector is braced for impact.
With other 100 Labour MPs calling for higher taxes on the industry, insiders are drawing up large-scale closure plans, meaning the betting shop on the Midlands high-street could be a hugely diminished presence.
The Proposed Tax Changes: A Triple Blow to the High Street
The government has conducted a study recently, which it says aims to simplify a complex web of duties applied to gambling.
However industry figures are less certain of the true motivations and fear the consultation is a smokescreen for a significant tax hike.
The proposals, supported by former Prime Minister Gordon Brown and conducted by the Institute for Public Policy Research, a Labour aligned thinktank, cover three primary areas.
Firstly, to increase the tax on fixed-odds betting terminals inside shops from 20% to 50%.
Secondly, the duty on all bets, both online and in-shop, the General Betting Duty, to increase from 15% to 25% or even as high as 30%.
Finally, the tax on online casino games, Remote Gaming Duty, to rise from 21% to 50%.
While Labour MPs are calling for a “targeted levy on online gambling,” Brown’s proposals explicitly include tax rises on retail betting shops to achieve parity with their online equivalents.
The prospect of staring down the barrel of a triple-tax increase has sent shockwaves through the industry.
The Arguments: Billions for the Public Purse Against Closures & Job Losses
At a time when the public purse is under significant pressure after COVID-19 and years of slow economic growth, proponents of the change simply say that gambling, as a successful sector in the UK, should pay its share to support the Treasury and public services.
Gordon Brown noted that, excluding the lottery, the gambling industry was worth about £11.5bn last year, but only contributed £2.5bn in tax.
The former Prime Minister and Chancellor argues that an extra £3bn can be raised from the industry by taxing it properly.
The IPPR agrees with this assessment and worked out that changes to gambling taxes could generate an extra £3.2bn.
This money could help public services, address significant and public national issues, and potentially lift up to 500,000 children out of poverty.
This is a compelling argument for a government that has struggled to make an impact.
The betting industry’s retort is simple. Gambling companies argue that the taxes would cause economic devastation, and retail operations are already financially precarious and wouldn’t be able to absorb huge tax increases.
In addition, new UK online casinos are changing the market, making gambling accessible from anywhere on computers and mobile devices and cutting operational costs associated with betting shops.
The warnings are not theoretical and backed up by the current state of the industry. Evoke, the debt-laden owner of William Hill, is already considering closing 200 of its 1,300 UK shops. This alone could put up to 1,500 jobs at risk.
Paddy Power, owned by gambling giant Flutter Entertainment, has indicated it will close 57 shops, threatening a further 247 jobs. Ladbrokes and Coral’s owner Entain has also warned of closures.
Beyond the high street, the racing industry is also greatly concerned of the effects of proposed tax increases. Betting shops contribute up to £350m a year through media rights payments and the levy to racecourses, a vital source of income for British horseracing.
Another consistent threat from the industry is that further costs and regulation will simply force punters towards unlicensed, illegal black market operators.
With offshore bookies becoming easier and easier to access through apps like Telegram and by using VPNs, which have become more common in Britain in the last few months after the Online Safety Act, fears that punters will turn to dangerous, unregulated bookies are growing.
A spokesperson from Evoke has warned that a tax increase could “impact investment and drive more customers to the black market.”
An Industry and High Street Already in Decline
The crisis is unfolding against a backdrop of long-term decline.
According to the Gambling Commission, the number of betting shops in Britain has declined by nearly a third in the last decade, from 9,000 in 2015 to 6,000 in 2024.
This can be explained by a number of larger factors, including a rapid decline in footfall on the British high-street, lower economic growth, increasing inequality, and the cost of living crisis, but can also be explained by the unstoppable rise of online gambling, where new UK online casinos changing the market offer a wider array of markets and products that the traditional high-street bookie cannot match.
The Treasury maintains that the consultation is “not about increasing or decreasing tax rates,” but rather about increasing efficiency and cutting bureaucracy.
However, with the Chancellor herself stating that betting companies need to pay their “fair share,” the industry is concerned. As November 26th approaches, the stakes could not be higher.
