UK Looks at Bigger Slot Machine Tax to Boost Budget

Chancellor John Healey is looking for extra revenue ahead of the October budget and the UK government is considering a big hike in taxes on gambling machines. UK Could Raise Machine Games Duty to 40% Under New Proposal The UK Treasury is understood to be looking at a range of options to increase the Machine Games Duty, which is levied on electronic gaming machines in casinos, adult gaming centers, bookmakers, bingo halls and other venues, reported The Times. The potential hike comes as Healey faces growing pressure to shore up the government’s finances while paying for higher defense spending and measures to help ease household costs. Recent moves in UK government bond markets have also put up borrowing costs, which could restrict the fiscal room of maneuver for the Treasury. One proposal being looked at would see Machine Games Duty rise to 40% for machines outside pubs. Research by the Social Market Foundation estimates that such a move could raise GBP 458 million ($619 million) a year for the government. The think tank also noted the concentration of adult gaming centers in economically disadvantaged communities. Its research found that the most deprived areas had, on average, six times more such venues than the least deprived areas. The issue has attracted further political attention as Prime Minister Andy Burnham has previously expressed concern about the spread of betting shops and adult gaming centers on British high streets. The government could therefore see increased machine taxes as both a revenue measure and part of a broader effort to mitigate the social impact of gambling venues. Any increase, however, would have to reflect the differences between gambling businesses. Extending the higher rate across the sector could place significant pressure on betting shops, casinos and other operators, industry figures have warned. The extra costs could lead to job losses, less investment and more closures, particularly on already struggling high streets. UK Gambling Tax Hike Could Push Punters to Illegal Operators The Betting and Gaming Council has warned that raising the cost of licensed gambling could drive some punters to illegal operators, possibly creating further regulatory headaches. Any future policy could have special treatment for pubs and bingo halls. However, government sources have indicated that exemptions or separate arrangements might be necessary, given the political sensitivity of such venues. This proposal comes after an earlier debate about taxation of gambling. Former Chancellor Rachel Reeves considered raising taxes on physical gaming machines but abandoned the idea after objections from the gambling and hospitality industries. Instead, her last budget had been more focused on taxing online gambling. The Social Market Foundation says that the economic consequences of machine gambling are more than just tax revenues. Its analysis estimated gambling-related harms associated with machine gaming at GBP 2.33 billion ($3.1 billion), including some GBP 669 million ($904 million) in costs associated with areas such as welfare, housing, crime and health care. There is no confirmed tax hike, for now. Gambling operators and high-street businesses are holding back to see if machines will emerge as a major source of additional government income, with the Treasury hinting that Healey will announce his fiscal decisions in the October 28 budget.