The UK Treasury is considering a significant increase in remote gambling tax, with rates potentially as high as 50%, posing a survival threat to high street betting companies. The industry warns that the tax hike could lead to numerous shop closures, increased unemployment, and trigger economic and social chain reactions. As the autumn budget approaches, policymakers face the challenge of balancing tax revenue with industry sustainability.
Tax Policy Changes and Industry Reaction
The proposal to raise the UK gambling tax aims to increase fiscal revenue, but the gambling industry strongly opposes it. Major operators such as Entain and Betfred warn that if the tax rate rises above 35%, retail gambling will become unprofitable, potentially leading to the closure of thousands of shops. Industry representatives point out that remote and retail gambling operations are highly integrated, and the tax increase would affect the entire ecosystem, not just the online sector.
Impact on Employment and the Economy
The tax increase could directly threaten about 40,000 jobs and cause a loss of up to £3.1 billion in UK economic output. Analysis by Ernst & Young shows that considering unemployment and reduced tax revenue, the Treasury's net gain might be less than £500 million. Additionally, the closure of betting shops would reduce sponsorship for horse racing and sports and foster the growth of illegal black market gambling, which has almost doubled in size over the past three years.
Social Impact and Future Outlook
High street betting shops are not only betting venues but also community social centers, and their closure could weaken community cohesion. Industry experts emphasize that the disappearance of shops would impact funding for mental health services, as 90% of related revenue comes from gambling activities. Policymakers are urged to consider differentiated tax rates to protect the retail sector and avoid negative impacts on public health.
