Paddy Power founder criticises Betfred warning on UK gambling tax rise

In short: Stewart Kenny, a co-founder of Paddy Power, says Betfred founder Fred Done is exaggerating the impact of proposed UK tax rises on gambling machines.

What happened

Stewart Kenny, who co-founded Paddy Power in 1988, has accused Betfred founder Fred Done of “scaremongering” about the effects of possible UK tax increases on the gambling industry. Kenny said he used “the same script” himself when he represented bookmakers and a tax rise was coming.

The dispute is about a Treasury proposal to double “machine gaming duty” to 40%. This is a tax on profits from gambling machines in betting shops, like the slot style machines you see on the high street.

Done told the Financial Times that if the tax rise goes ahead, Betfred would have to close 495 shops. He said that could mean 2,575 job losses and £67 million less tax paid from those shops. Betfred has already announced 132 shop closures after a separate tax increase on online gaming.

Kenny said similar warnings were made before limits were introduced on fixed-odds betting terminals (high speed betting machines), and the predicted damage did not happen. Kenny also argued that machine style gambling should face higher taxes because it can be more addictive, compared with betting on sports.

The Betting and Gaming Council said it is hard to separate the impact, because companies manage their retail and online businesses together. It warned that extra costs in one area can affect jobs and shops elsewhere.

Why it matters

If the government raises taxes on gambling machines, it could change what betting shops offer, how many shops stay open, and how much support gambling firms give to sports through sponsorships. For many towns, betting shops are part of the local high street, so closures can affect jobs and nearby businesses.

Source: Financial Times