Fred Done, the 83-year-old founder of Betfred and Britain’s highest-paying taxpayer this year, has warned that further gambling tax increases could force widespread betting shop closures, damage horse racing and accelerate the decline of the high street.
Betfred operates approximately 1,094 retail shops across the UK. Done said a possible increase in Machine Gaming Duty (MGD), which applies to gambling machines, from 20% to 40% would put significant pressure on the company’s retail estate. The increase is reportedly being considered by Chancellor John Healey ahead of the Autumn Budget.
Potential impact on Betfred
Betfred’s retail business remains heavily dependent on fixed-odds betting terminals (FOBTs) and other in-shop gambling. Although the maximum FOBT stake was reduced to £2 in 2019, the machines still account for roughly half of Betfred’s shop profits. Done said retail betting would be “impossible” without them.
He said doubling MGD would lead Betfred to close 495 shops within a year, costing 2,575 jobs and approximately £67 million in tax revenue for the Exchequer.
The operator has already closed 132 outlets this year following last year’s increase in Remote Gaming Duty (RGD). Chief Executive Jo Whittaker said at the time that higher employer National Insurance contributions, wage inflation, gambling tax increases and wider economic uncertainty had made the closures unavoidable.
Evoke closed 200 William Hill stores in April this year for the same reason. Stella David, CEO of Entain, has separately forecast that a higher MGD rate would add £100 million to Entain’s operating costs. In a letter to the UK Prime Minister last week, David warned that the policy would affect high street workers and communities.
“They are people losing their jobs and communities losing long-established high-street businesses,” David wrote.
Betting shops and the high street
Done said the closures formed part of a wider decline in high street retail and predicted that betting shops could disappear entirely by 2030.
“I believe that by 2030 we will have no betting shops. The high street will be dead. We’ve already worked it out that with the increases in taxes and salaries and other wages it won’t be worth operating,” he said.
Betfred sponsors Britain’s five classic horse races, including the Epsom Derby, but Done said the company had not agreed to extend those sponsorships while tax policy remained uncertain. He also warned that reducing regulated gambling provision could push people with gambling problems towards the black market, and rejected claims from Dame Meg Hillier, chair of the Treasury Select Committee, that industry warnings amounted to “scaremongering”.
Burnham has also said “aim to permit” should be scrapped for betting shops and that adult gaming centres will need planning permission to operate.
Done questioned how much additional tax wealthy UK business owners should bear, saying: “They keep saying those with the broadest shoulders should be paying more tax. Well, how broad do my shoulders have to be? We paid £400 million in taxes as a family last year.” He said he did not want to leave the UK, although his children might seek more favourable tax regimes abroad.
