Two of Britain’s biggest gambling operators have warned John Healey that further tax increases in this month’s Budget could force betting shops and casinos to close, putting jobs and investment at risk.
Entain, the owner of Ladbrokes and Coral, and Rank Group, which operates Grosvenor Casinos and Mecca Bingo, issued separate warnings on Thursday despite reporting growth in their UK businesses.
Entain said net gaming revenue rose two per cent in the third quarter, with its UK and Ireland business growing eight per cent, driven by a 14 per cent jump in online revenue.
Chief executive Stella David urged the government to reconsider any further tax increases on the sector.
“We strongly urge the UK government to carefully consider any further gambling tax increases which would threaten the viability of many shops, jobs and livelihoods”, she said.
Rank chief executive, Richard Harris, warned that speculation over further gambling tax increases was already weighing on the company’s investment plans and could lead to layoffs.
“Any increase to Machine Games Duty will increase costs, reduce venue viability, lead to venue closures and job losses, reduce tax receipts and halt investment”, he said.
The company reported a five per cent rise in like-for-like net gaming revenue to £216.1m in the three months to September, supported by growth across its casinos and digital operations.
Its Grosvenor venues recorded six per cent growth, while digital revenue also climbed six per cent.
Gambling firms brace for Budget tax rises
The warnings come ahead of Healey’s first Budget on 28 October, where the chancellor is expected to launch a series of tax rises to bolster the public finances amid higher borrowing costs and spending pressures.
Gambling companies have faced growing scrutiny over their tax contributions, with speculation that the Treasury could target the sector for additional revenue.
Rank said its UK digital business had remained resilient despite higher taxes introduced in April, although it had reduced marketing spending.
The company also closed three venues during the quarter, in Swansea, Reading Central and Sunderland, which it said were no longer economically viable.
It maintained its full-year profit expectations, assuming no further changes to the current UK tax regime.
Entain also reiterated its annual guidance, although it expects underlying earnings at the lower end of its £910m to £960m range.
Its international business remained under pressure, with revenue falling four per cent amid difficulties in Brazil, where the government introduced an immediate ban on online gambling in September.
The group’s US joint venture BetMGM provided a brighter spot, reporting third-quarter revenue of $710m and adjusted earnings of $86m, more than double the previous year’s figure.
Entain said it continued to expect online revenue growth of between four and six per cent for the full year.