Britain’s Treasury is contemplating a sharp increase in remote gambling duties, with proposals suggesting rates could soar to 50% on gross gaming revenue. This potential change has cast a shadow over the UK’s high street bookmakers, a staple of local life and working-class leisure, as the gambling industry warns of the dire consequences of what it describes as an imprudent fiscal move.
Even before the prospect of increased taxes, the retail gambling sector has been struggling due to the migration of gambling habits to online platforms. Quarterly reports from Entain, which operates over 2,000 stores under its Ladbrokes and Coral brands, describe retail as a “stable” yet low-growth segment. Despite this, Entain maintains that it values its shops as the foundation of its brand.
Major gambling operators have voiced strong objections to the proposed tax hike, warning it could lead to the eradication of retail betting in the UK, risking thousands of jobs and hundreds of shop closures. Following recent closures by Flutter, Evoke, which runs 1,300 William Hill outlets, has also indicated it might close up to 200 shops—15% of its estate—should taxes increase. Entities like Entain and Betfred echo these concerns.
Betfred’s founder, Fred Done, expressed his apprehensions in an interview with the BBC on October 19, stating, “If [the tax rate] went up to anywhere like 40% or even 35%, there’s no profit in the business. We would have to close it down… probably 7,500 job losses.”
A representative from Flutter UK & Ireland reiterated the potential negative impact of a tax increase on its retail operations, noting that they had to close 57 Paddy Power shops last month, even before any tax hike. “Any tax increase on business isn’t a free hit, it comes with consequences,” they cautioned.
The proposed rise in gambling duty is expected to have a substantial impact on jobs and sports sponsorships while bolstering an illegal black market that has nearly tripled in size in the UK over the past three years. A report commissioned by the UK’s Betting and Gaming Council (BGC) in October suggested that such a “tax raid” could obliterate £3.1 billion from the UK’s economic output and jeopardize over 40,000 jobs.
An analysis by EY found that after accounting for lost employment, reduced corporation tax, and lower National Insurance contributions, the Treasury’s net gain from the proposed gambling tax hikes might not exceed £500 million. The BGC emphasized, “Further tax hikes would devastate jobs, reduce Treasury revenues, and drive billions into the hands of the black market.”
Despite the outlined consequences of a potential tax increase on the already struggling retail sector, some parliamentarians remain skeptical of the industry’s warnings. During a Treasury committee session in Parliament on October 28, committee members questioned BGC CEO Grainne Hurst and tax policy advisor Stephen Hodgson. They seemed doubtful of the sector’s claims that retail would suffer even if remote taxes were increased.
Hurst explained that UK gambling companies operate a “circular economy” with a single profit-and-loss model, meaning that any impact on one part of the business would inherently affect the entire group. “They will be reinvesting money they make in one part of their business into another. And so if we see any additional further tax increases on any part of the sector, it is likely to have an effect on the retail side of the business,” Hurst told the panel. Hodgson added, “These are businesses that operate in an integrated manner. So if you were to increase remote taxes and leave land-based taxes untouched, you would still see a consequence on the overall ecosystem.”
The panel also explored the possibility of protecting the retail sector from any tax increase by establishing separate rates for online and retail betting activities. Currently, the industry pays a flat 15% General Betting Duty on profits from both online and in-person bets. During the meeting, Paddy Power co-founder Stewart Kenny proposed a lower rate for retail activities to help preserve high street bookies. “I believe there should be provisions in any taxation [model] that betting shops will be lower because they can be a real social hub for people who don’t drink, to have fun. Betting shops do have a future, but obviously like everything on the high street, they are going to suffer,” he remarked.
The human impact of potential shop closures is another pressing concern for operators. In an interview with The Times, Entain CEO Stella David said closures would detrimentally affect community identity. “We don’t want to close shops,” she stated. “These are part of Britain’s cultural fabric—not just places to bet, but places where people come together.”
The sentiment of loss is shared across the industry, as noted by Bethan Lloyd, a senior associate at Wiggin LLP who previously worked in William Hill’s legal team. She emphasized the unique role high street bookmakers play in the lives of punters. “Many of these bookies serve as a social base for their regular customers; it is sad that this will be taken away,” she noted.
A Flutter spokesperson echoed similar sentiments, stating, “Many of our shops play a central role in communities and we are committed to our retail estate, but clearly any duty rise in the upcoming budget could impact our plans.”
Dan Waugh, a partner at Regulus Partners, highlighted the social consequences of losing betting shops. “Millions of people choose to bet and watch racing in shops despite the fact they can do both at home. A meaningful number of consumers will find their lives negatively impacted by the withdrawal of an activity that brings them pleasure,” he explained.
Mark Pearson, Betfred’s head of corporate affairs and communications, underscored that the retail sector is more than just a financial metric. “Retail is the very heartbeat of our business,” he said. “Fred [Done] started with just one shop in 1967. Betting shops are a massive part of communities and high streets.”
The broader ramifications include reduced investment in horse racing and sports, and a “free pass for the black market that offers no protection for vulnerable players.” The BGC estimates that 1.5 million Britons wager up to £4.3 billion annually with unlicensed operators in the burgeoning black market.
Dan Waugh also warned about the potential reduction in funding for gambling disorder treatment, harm prevention initiatives, and research. “If consumer spending in these channels falls as a result of tax increases, then we may see essential mental health treatment services collapse,” he cautioned.
The threat to the UK land-based gambling sector extends beyond betting shops. Proposed tax structures from think tanks like the IPPR and Social Market Foundation (SMF) would impact all land-based gambling venues, including casinos, bingo clubs, and seaside arcades. Waugh criticized the SMF and IPPR reports, calling them “extremely poor quality,” and lamented, “Neither think tank appears to have considered the impact of shutting down large swathes of the land-based industry.”
Yet, Bethan Lloyd acknowledged the challenges of converting customers between online and retail platforms, noting that many retail clients don’t regularly bet online. Stricter marketing rules also complicate omnichannel strategies.
Behind the UK’s high street bookmakers are thousands of employees, many of whom have been with the same communities and companies for decades. Lloyd highlighted the personal cost, noting that these employees are unlikely to be redeployed as the industry tightens its belt. “This route will be minimized or removed, and with it, the grassroots knowledge of the punter and the product,” she explained.
Waugh agreed that political advocates of the tax hike underestimate the disruption. “It is easy for people in Westminster think tanks to say that betting shop employees can easily find work elsewhere,” he noted. “This ignores the fact that unemployment is rising, that in some parts of the country jobs simply aren’t there.”
Retail betting shop closures could also ripple through British racing and related industries. A quarter of racing turnover occurs in betting shops, and their disappearance would erode media rights revenues and levy receipts. Lloyd remarked, “Racing will be the most impacted, given the demographic of the shops’ customers and their betting patterns.”
As the Chancellor’s autumn budget approaches, the industry’s lobbying efforts are intensifying. Entain’s Stella David urged policymakers to consider the long-term impacts beyond immediate revenue. “When you start damaging the regulated market, you don’t get less gambling, you just get less safe gambling,” she told the media.
The British bookmaker, a long-standing icon, now stands at a crossroads. While taxation aims to bolster public finances, it may inadvertently hollow out the very communities it’s intended to support. If the environment becomes unsustainable for operators, policymakers might soon witness the disappearance of one of Britain’s last surviving high street institutions.
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