Operators warn Government that increasing MGD would devastate casinos
Senior leaders of the casino industry have warned the Treasury that increasing Machine Gaming Duty (MGD) would risk hundreds of millions of pounds investment, cost thousands of jobs and drive customers to black market operators.
Paul Willcock, president of Genting UK, Simon Thomas, executive chairman of The Hippodrome, and John O’Reilly, chief executive of Rank Group plc, have written to the Government on behalf of the Betting and Gaming Council’s casino committee in a last-ditch bid to prevent a hike from the current 20% in the Budget on November 27th.
They argue that the progress achieved by recently introduced legislation to modernise and deregulate casinos, increasing gaming machine allocations and introducing sports betting, will be wiped out by a tax increase.
“At 25% MGD, casino industry analysis shows that up to 40 casinos would close, with the loss of up to 3,500 jobs – equating to a third of the whole industry,” say the casino operators.
“Any proposed increase in MGD in the Chancellor’s budget, would lead to…the loss of thousands of skilled jobs, as well as risking planned UK-wide investment in the sector”.
They point out that £300m of investment, planned by operators after the Government brought in its reforms, is now at risk. The list includes:
- Rank Group plc investment of £60million per annum for next two years, to capitalise on casino reforms
- Genting Casino £40million new casino at the Trocadero in London’s West End
- Genting Casino Westcliff £10million refurbishment in Southend-on-Sea
- Rank’s Grosvenor Victoria Casino £15million refurbishment and expansion in London
- Bally’s £3.7million, securing 170 jobs, first UK land-based investment in Newcastle
- Hippodrome £1.5million new Sports Book venue in London’s West End
- Other multi-million-pound redevelopments of casinos in Brighton, Bolton, Coventry, Leicester, Liverpool, Manchester, and Reading
Casino operators say the threat of closures is not an empty threat and Genting has been forced to close eight sites in the last six years, representing one quarter of its estate.
The sector generates £866 million in gross gambling yield each year, but increasing MGD to 30% would typically wipe put 50% of operators’ profit. If more casinos are forced to close, it will mean less overall duty and tax paid to the Government whilst encouraging the rise of unlicensed premises which pay no taxes and provide no player protections.
A Genting spokesperson said: “MGD increase is an existential problem for the casino industry and one which will cost jobs and simultaneously grow the unregulated black-market. The land-based casino sector is already highly taxed, and the Government should prioritise the job security of workers and their families, the ability to invest for growth, and the future safety and protection of customers”.
Preview image: Shutterstock
