Betfred shops could be forced to close on UK high streets under Rachel Reeves’ proposed tax hikes on gambling firms, the chain’s boss has said.
According to Fred Done, Betfred’s co-founder and chairman, this move would put 1,287 shops and 7,500 jobs at risk.
The businessman, who founded Betfred in 1967 with his brother, said tax rises were the “biggest threat” he had seen to the industry in his 57 years. Betfred’s competitors have echoed the sentiment.
The Chancellor has responded to suggestions of increasing taxes in the budget. Speaking to ITV, she said: "I do think there is a case for gambling firms paying more… they should pay their fair share of taxes and we will make sure that happens."
Former Prime Minister Gordon Brown suggested increasing taxes on the gambling sector and using the income to reduce child poverty.
The Institute for Public Policy Research (IPPR) think tank has predicted that bonus taxes as high as 50 per cent could raise £3.2 billion.
Brown’s plan was initially criticised by the Betting and Gaming Council, which called it "economically reckless", warning it would push gamblers towards the black market.
Earlier this month, Evoke, which owns gambling company William Hill, warned that up to 200 outlets could close if the industry was forced to pay more in tax.
Done, of Betfred, shared this concern, warning that if taxes were increased, he would have to close his high street shops.
He told the BBC: "It [tax] doesn't even need to go up to 50 per cent. If it went up to anywhere like 40 per cent or even 35 per cent there is no profit in the business. We would have to close it down. I'm talking job losses. We're talking probably 7,500."
Done disclosed that 300 of his shops were “currently losing money” and warned that a 5 per cent tax increase would raise that number to 430.
He added: "Once the [UK] industry is closed down, it's gone. People will still bet, but they'll bet offshore with it. There's plenty of bookmakers offshore who happen to take the bets, who don't pay anything to this country."
Gambling winnings in the UK are not taxed, and VAT is not charged on bets, but the industry does pay extra taxes on online stakes, sports fixtures and betting duties.
Done shared that the recent increases in National Insurance Contributions (NICs) and the minimum wage has already cost him an extra £20 million.
He explained that much like the retail industry, customers are going online to meet their needs, making his high street presence expensive and redundant.
Betfred’s competitor, Paddy Power, said on Thursday it would close 57 shops across the UK and Ireland due to increasing pressures and market challenges.
Records show that last year, Betfred made almost £1 billion in revenue, but an operating profit of just £500,000 after several writedowns on its assets.
Critics highlight the social and financial damage of gambling, which cost an excess of £1-1.77 billion in external costs in 2023, according to the Office for Health Improvement and Disparities.
According to Professor Ashwin Kumar, director of research and policy at the IPPR, higher taxes are needed to discourage people from gambling.
He said: "We know that most of the profits made by gambling companies come from a very small number of gamblers, many of whom are at risk of serious harm. And so we think that the duties should be higher, just like tobacco and alcohol."
Charity GambleAware warned of the dangers of gambling on children and young people, saying "further regulation" was needed to raise awareness about the risks.
Mr Done claims that high street betting shops ensure safeguards are in place, as well as tax revenues, in a way which online and offshore competitors do not.
But Mr Done is not confident that his appeal will sway the chancellor, and said "we're 10 to one against", implying that he expects betting shops to close.
A HM Treasury spokesperson said: "We do not comment on speculation around future changes to tax policy."
