Betfred Warns of Job Losses as Reeves Proposes Gambling Tax Hike

Betfred, one of the UK’s largest betting companies, has issued a stark warning that thousands of jobs may be at risk if Chancellor Rachel Reeves proceeds with proposed tax increases on gambling firms. The company’s founder, Fred Done, stated that the potential tax hikes could threaten all of Betfred’s 1,287 shops and approximately 7,500 jobs, marking what he calls the “biggest threat” to the industry in his 57 years of experience.

Reeves has suggested that increased taxes on gambling companies could be a key strategy to address a significant £30 billion deficit in public finances ahead of her upcoming autumn Budget. She emphasized that gambling firms should “pay their fair share of taxes,” indicating a commitment to ensuring compliance in the sector.

Done expressed his concerns, stating, “If it went up to anywhere like 40% or even 35%, there is no profit in the business. We would have to close it down.” He highlighted the implications of such closures, warning that job losses could be substantial and that when the UK industry shuts down, betting activity will simply shift to offshore bookmakers that do not contribute to the UK economy.

The alarms raised by Betfred resonate with similar sentiments from other companies in the gambling sector. For instance, William Hill recently reported that approximately 300 stores are currently unprofitable, a situation that could worsen with a 5% increase in gambling taxes, potentially affecting as many as 430 stores.

The Betting and Gaming Council has also cautioned that raising taxes could inadvertently drive gamblers to the black market, undermining legitimate businesses. This warning comes at a time when inflation in the UK is anticipated to rise to its highest level in 21 months, putting further pressure on Chancellor Reeves and the Bank of England.

Economists are forecasting that the Consumer Prices Index (CPI) inflation rate could reach 4% in September, according to data expected to be released by the Office for National Statistics. This forecast follows a CPI of 3.8% in July and August, driven by escalating food prices and increased operational costs for businesses. Analysts at Pantheon Macroeconomics attribute this inflationary spike to rising prices for fuel and air travel.

The anticipated inflation figures could significantly influence the Chancellor’s budgetary decisions. The September inflation rate often dictates adjustments to various benefits, including universal credit, tax credits, and pensions under the Pension Triple Lock. This mechanism determines pension increases based on inflation, average earnings growth, or a fixed rate of 2.5%.

As the Chancellor navigates these complex financial pressures, a rise in inflation could lead to higher-than-expected government expenditure, complicating efforts to address the fiscal shortfall. The outcome of these impending tax discussions may have lasting implications not only for the gambling industry but also for the broader economic landscape in the UK.