Jennings Bet managing director Greg Knight has warned that a proposed machine gaming duty hike could force the closure of 104 of the bookmaker’s shops.
The UK government is considering increasing machine gaming duty from its current rate of 20% to 40%, a move backed by the Social Market Foundation.
Knight says applying the new tax rate to the last 12 months of trading figures reveals clearly which stores would survive and which would not.
He explained: “We just apply the new tax to the last 12 months’ figures. And then you can see store by store, which ones are profitable and which aren’t.”
The 104 potential closures would represent nearly half of Jennings Bet’s 212-shop retail estate, a significant reduction by any measure.
Knight also estimates that between 400 and 450 redundancies would follow if those closures were to materialise across the company.
He argues that if a similar ratio of closures played out across the wider sector, the overall tax yield for the Treasury would actually fall rather than rise.
Knight believes that a reduction of one third in the number of betting shops is a conservative estimate of what the MGD increase would trigger across the industry.
He stated that “the tax burden on the others doesn’t cover the absent shops,” making the case that the policy would be self-defeating from a fiscal standpoint.
Knight suggested that if the decision rested purely with the Treasury on fiscal grounds, there would be no case for the increase at all.
He questioned whether political motivations were overriding economic logic, asking: “If it becomes a political decision and someone says ‘look, all these shops are going to shut,’ have you got a government that says ‘good’?”
Knight contends that the industry has already demonstrated ahead of a previous budget that increasing the tax burden on machine games “actually doesn’t work,” yet campaigners continue to push the measure.
He believes those driving the agenda are approaching the subject from a political angle rather than a fiscal one, ignoring evidence gathered from prior tax increases.
The Social Market Foundation’s policy proposal to double MGD to 40% has gained considerable momentum among those pushing for tighter controls on gaming machines in retail settings.
