Betfred has issued a stark warning that all its 1,287 UK betting shops could close if the government proceeds with planned increases in gambling taxes, a move that would endanger 7,500 jobs. The company’s co-founder, Fred Done, described potential tax hikes as the greatest threat to the industry in over five decades.
Fred Done, who founded Betfred with his brother in 1967, told the BBC that any significant increase in gambling duties could make the business unprofitable, forcing the closure of all its High Street locations. He emphasized that even a rise to 35% or 40% from current levels would eliminate profits, leading to widespread job losses. This warning echoes concerns from other betting firms, with Evoke, owner of William Hill, suggesting up to 200 of its shops might close under similar circumstances. The industry-wide anxiety highlights how tax changes could reshape the retail betting landscape.
The potential tax increase is being considered by Chancellor Rachel Reeves, who has stated that gambling firms should ‘pay their fair share of taxes.’ She has been encouraged by former Prime Minister Gordon Brown to use revenue from higher gambling taxes to reduce child poverty. The Institute for Public Policy Research (IPPR) estimates that raising taxes to 50% could generate £3.2 billion for the treasury. This proposal has gained traction amid debates on fair taxation and social welfare, positioning the gambling sector as a potential source of public funds.
However, the betting industry strongly opposes these measures, arguing that higher taxes would drive gamblers to unregulated offshore operators, reducing tax revenues and increasing risks for consumers. The Betting and Gaming Council labeled Brown’s plan ‘economically reckless,’ warning it could decimate the legal gambling sector without addressing underlying issues. Companies like Betfred stress that offshore bookmakers often avoid UK taxes altogether, undermining the government’s revenue goals and consumer protections.
Betfred’s situation is compounded by existing financial pressures, including recent increases in employer National Insurance Contributions and the minimum wage, which have added £20 million to its costs. Done noted that 300 shops are already losing money, and a 5% tax hike could push that number to 430, accelerating the decline of the High Street. He acknowledged the shift to online betting is inevitable but argued that without tax increases, High Street shops could remain viable for up to 20 years, providing jobs and local economic benefits.
The debate over gambling taxes intersects with broader concerns about social harm. Research from the Office for Health Improvement and Disparities estimated the excess costs of harmful gambling at between £1 billion and £1.77 billion annually. Prof. Ashwin Kumar of IPPR advocates for higher duties, similar to those on tobacco and alcohol, to reflect the negative impacts on vulnerable individuals. He pointed out that most gambling profits come from a small number of at-risk gamblers, justifying steeper taxes to mitigate public health costs.
Despite these arguments, Done contends that UK-based betting shops offer better consumer protections and contribute more to the economy than online or offshore alternatives. He warns that closures would not stop gambling but would shift it to less regulated environments, reducing oversight and tax income. As the November Budget approaches, the outcome remains uncertain, with Done rating his chances of persuading the chancellor at ’10 to one against.’ A Treasury spokesperson declined to comment on speculation, leaving the industry and its employees in suspense over their future.