Opposition to the high-level intervention of Labour Party mandarin and former British prime minister Gordon Brown calling for massive gambling tax hikes is surging.
Stella David, newly-appointed CEO of resurgent gaming giant Entain, has effectively warned Chancellor Rachel Reeves that the mooted tax increases–which would unify and double gaming taxes from the current 20 percent to 50 percent–would quite simply kill the proverbial golden goose – and further push the nation’s gambling space into the murky, clandestine world of illicit off-shore betting sites, losing–not gaining–the exchequer billions of pounds in tax income.
“Of course, we don’t want to see taxes go up in the UK. We have this fantastic portfolio business,” David, appointed permanent Entain CEO in April this year, told UK paper-of-record the Financial Times.
Tax increases would push bettors to the illegal gambling market, David stressed.
And citing the recent example of the Netherlands, where so-called gambling reforms and a new gaming tax regime have only served to foster the iGaming black market, Entain CFO Rob Wood told the FT:
“It’s a good reminder to the Treasury that if you do put taxes up, then, ultimately, the tax take goes down, not up, because of leakage to the black market.”
Negative Impact
This warning about fiscal over-reach and the almost certain negative impact of big gambling tax hikes, has long been a mainstay of pro-gaming boosters and Britain’s world-leading betting industry; an industry that in this country alone employs an estimated 100,000 people and pays some £4.5 billion in taxes (US$6.1bn).
But–as recently reported in iGamingFuture–Labour political big beast Gordon Brown has thrown his considerable campaigning and moral weight behind a plan mooted by the Left Wing Social Market Foundation think-tank to raise gambling taxes by a further £3 billion (US$4.06bn).
Amid the fear of looming tax increases–and the massing of anti-gambling activists on the attack horizon, among them the All-party Parliamentary Group for Gambling Reform–, the value of shares in most London Stock Exchange-listed betting companies has fallen in recent days.
For example, while shares in once-troubled Entain–which was hammered by a mega £585 million fine in December 2023 (US$743m) by UK financial regulators for historic money laundering breaches–have risen by some 30 percent since the beginning of this year, they have now fallen by around three percent in the last week – despite reporting an otherwise excellent comeback H1.
According to some reports, Britain’s clandestine gambling market has quintupled in the last decade.
The gambling industry’s representative Betting and Gaming Council estimates that around £2.7 billion (US$3.66bn) is wagered illicitly every year, compared to the legal handle of £128 billion (US$173.54bn).
And a recent survey by market researchers YouGov revealed that two of every three gamblers they polled believed that “increased tax rates [will] make customers turn to unregulated betting sites”.
A 500 percent growth in the UK betting black market tells its own story.
Regulated Greed
The current Labour government and its constituent gambling regulators would be well advised to listen to industry experts and responsible gaming business practitioners if they don’t–indeed–want to kill one of the nation’s great financial success stories.
To continue the Aesopian analogies, the road to hell is paved with good intentions – and undeclared greed.
As always.
Watch this space!
