Independent bookmakers face 'hammer blow' from new statutory levy on gambling operators

Independent betting shops are facing a "hammer blow" from the new statutory levy on gambling announced by the government this week, after pleas for the sector to be treated differently to major companies fell on deaf ears.

More details emerged on Wednesday about the long-awaited levy, which is intended to raise £100 million a year for the research, prevention and treatment of gambling harms, paid for by operators. The plans were first proposed as part of the previous government's gambling review and were the subject of a consultation which closed in January.

That consultation included proposals to levy online operators at a rate of one per cent of their gross gambling yield (GGY) – the amount retained by operators after winnings have been paid out – while betting shops would pay at a rate of 0.4 per cent. Operators would also only have to pay the levy over a GGY threshold of £500,000.

Independent bookmakers, backed by the Betting and Gaming Council, had argued they should pay a lower rate, especially as land-based arcades were only having to pay at 0.1 per cent.

However, in its consultation response, the government has increased the rates to 1.1 per cent for online and 0.5 per cent for betting shops in order to raise the yield to £90m-£100m per year from the projected £84m under the original rates.

Arcades will pay at a rate of 0.2 per cent, rather than 0.1 per cent, as will on-course bookmakers. The threshold has also been reduced, so only operators due to pay £10 or less will be exempt from the levy.

A BGC spokesperson said: "While the BGC supported plans to introduce a mandatory levy to fund research, prevention and treatment services to tackle problem gambling and gambling-related harm, we are deeply concerned about this effective tax hike on our members, particularly independent bookmakers and land-based casinos.

"The proposed levy rate for independent bookmakers is a hammer blow to the 500 small independent betting shops and the 2,500 people who work in them, which risks job losses and venue closures, while contributing a small amount to the overall levy total. 

“At the same time, the government’s incoherent approach allows the National Lottery, Adult Gaming Centres [AGCs] and seaside arcade centres, to pay significantly less towards the levy."

Greg Knight of Jenningsbet: "Where does it stop?"Credit: Mark Cranham (racingpost.com/photos)

Greg Knight, managing director of independent firm Jenningsbet, said the extra amount raised for the levy from independent betting shops would not be significant compared to the pressure that would now be put on the sector.

He added: "They are community hubs. We know all of our customers. We are absolutely, in our opinion, no more of a risk than AGCs which are open all night. We can't see why we would be separated from them. So now when you walk down your high street, one AGC will be paying less than a betting shop.

"The other important point is that's where the employment is. It's where the jobs are. So if I am doing a list now I've got the raised costs of employment, I've got business rates and now they've hit us with a mandatory levy.

"I understand it is not as big as online but certainly for the independent sector it would not have been too much of an ask to separate out those shops and keep them on at least the same rate as AGCs."

The levy, which will come into force in April, comes on the back of the recent increase in employers' national insurance contributions and the national living wage.

Knight added: "Even as someone who operates online, almost all of the concerns that are voiced about gambling are in the online sphere, and yet we are being clobbered by a huge tax which is not of our making.

"For me personally that is going to represent nearly half a million pounds. So if you add in the million pounds it is going to cost me with the recent budget and the pressures from media rights – racing wants more from the levy as well – where does it stop? Join the queue."

Read these next:

Government confirms plans to introduce new £100 million levy on gambling operators 

'It would be nice if they'd listen' - independent bookmakers spell out concerns to government over statutory levy rate 

Minister moves to calm fears new statutory levy will hit problem gambling charities 

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