J D Wetherspoon Founder Concerned About Potential UK Tax Increase

The founder of one of the UK’s largest pub chains is wary about the prospect of tax increases in the hospitality industry, which could impact revenue generated from gaming machines.

Sir Tim Martin, Founder and Chairman of J D Wetherspoon, which operates approximately 800 pubs in the UK, is quoted by The Times as saying he is “concerned about any tax increases for the hospitality industry.” In its latest financial year, which ended on July 27, the company generated £73.2 million from slot and fruit machines, which made up 3% of the total revenue of £2.13 billion and was up from £66.9 million in 2023/24.

What’s the issue?

On November 26, Chancellor Rachel Reeves is expected to announce increases to gambling taxes. While much of the discussion has been around the potential implementation of a remote betting and gaming duty, which would replace the current system of three separate remote betting taxes, there is also the possibility of an increase in machine gaming duty (MGD).

The Institute for Public Policy Research, an independent charity, has proposed an increase in MGD from 20% to 50%, which would cover slots and gaming machines. The IPPR has also called for remote gaming duty to increase from 21% to 50% and for general betting duty on non-racing bets to go up from 15% to 25%.

A steep increase

In the 2024/25 financial year, Wetherspoon paid £18.2 million in MGD. If a 50% tax rate were applied, this would have been closer to £40 million. According to Martin, an increase in MGD to 50% would reduce J D Wetherspoon’s total post-tax profit by 48%, based on its current gambling revenue. However, Martin said fruit machines are now “a far lower percentage of sales than in the past, even after picking up post-pandemic.”

Former Prime Minister and Chancellor Gordon Brown and his wife Sarah Brown have backed the IPPR’s proposal, arguing the revenue generated from the tax increases could effectively pay for the government scrapping the two-child benefit cap. The IPPR has argued the £3.2 billion in tax revenue generated from its proposal would cover this.

Industry warnings

The Betting & Gaming Council (BGC), which represents approximately 90% of the UK betting and gaming industry, has claimed even a 25% MGD rate could force up to 40 casinos to close, with 3,500 jobs being lost; a third of the entire UK casino workforce.

Simon Thomas, Executive Chairman of the Hippodrome Casino in London, John O’Reilly, CEO of Rank Group, which operates Grosvenor Casinos, and Paul Willcock, President and COO of Genting Casinos UK, are reported to have written to the Treasury. The executives have warned that “any proposed increase in MGD in the chancellor’s budget would lead to the closure of a large number of casinos and the loss of thousands of skilled jobs.”

Additionally, Thomas is quoted by the BGC as saying: “Casinos have only just begun to recover from the pandemic and years of economic pressure. A tax rise now would derail investment plans, force closures, and damage Treasury revenues in the long term.”

Last month, the BGC published research carried out by Ernst & Young, which showed the IPPR’s proposal could lead to £8.4 billion in gambling stakes moving to the black market, with operators missing out on £1.06 billion in revenue. The research indicated that across the industry, more than 40,000 jobs could be impacted.

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