Hippodrome Casino Chairman Levels ‘Self-Sabotage’ Claim Over Taxes

The Chancellor of the Exchequer should do all she can to avoid raising Machine Games Duty (MGD); otherwise, she risks stunting the progress of the casino sector. That is the forthright opinion of Hippodrome Casino Executive Chairman Simon Thomas.

There has been constant speculation that MGD could be bumped up from 20% to 25% in next week’s budget, which would represent a body blow to the industry. And Thomas is adamant that raising the rate would reverse any possibility of casinos continuing to thrive moving forward.

Undoing all the good work

Although recent figures published by the UK Gambling Commission (UKGC) showed  online gross gambling yield (GGY) had surged, thanks to the performance of slots. Despite the slump in retail betting, the UK government introduced a modernisation package over the summer designed to inject life into the casino industry. Indeed, the deal recognised casinos as a major anchor of the nighttime economy.

The reforms that were brought in by the Department for Digital, Culture, Media & Sport (DCMS) were intended to overhaul outdated regulations. In its pledge, they offered to open up more gaming space in casinos and put the industry on a more level footing.

According to Thomas, these reforms have started to deliver. He pointed to the £300 million worth of new investment that has been freed up, as well as allocating funds to support regeneration projects across the UK.

An act of self-sabotage?

Since 2012, the Hippodrome Casino has invested £65m — £50m was ploughed in at launch — and this was followed by reinvestment and expansion, making London a hub for gambling. Meanwhile, the Rank Group poured in £60m of investment over two years to revamp venues, whereas Genting confirmed the £40m opening of a new casino at London’s Trocadero and a £10m refurbishment in Southend.

But Thomas, who also serves as a board member of the Betting and Gaming Council (BGC), believes a rise in MGD would be disastrous. Indeed, he thinks the government could tear apart the industry.

He said:

“The current 20% [of MGD] strikes the right balance between a fair contribution to the Treasury and the ability to reinvest in people, places and innovation.

“Raising it would be an act of self-sabotage, cutting off a growing source of tax revenue just as it begins to flourish.”

Facing up to a grim reality

Currently, UK casinos provide hundreds of millions in tax revenues each year, and Rachel Reeves has previously stressed that gambling operators should pay their ‘fair share of tax’. While casinos took a hit over the past few years due to the pandemic and ongoing economic pressures, they support 11,000 jobs across the country.

Many of these roles are full-time, offering a stable income, and they come with career progression. That said, analysis carried out by the BGC suggested that raising the MGD rate would see 40 casinos shut down, and see 3,500 jobs cut.

Hold fire for now

While casinos are considered engine rooms for growth, helping to bolster the UK economy, the government has a big financial blackhole to fill. All will be revealed in Reeves’s budget speech; however, Thomas has implored the government not to make any rash decisions.

He added: “We are ready to invest, to modernise, and to support local economies across the UK. But we can only do that if the goalposts stay still.

“So my message to the Chancellor is clear: resist any temptation to raise MGD. Protect jobs, protect investment, and protect growth.”

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