BGC CEO: Hiking UK tax will lead players to the "lurking menace" of the black market
Grainne Hurst ramps up rhetoric against rumoured tax rises as she leans on new EY report which claims sector contributed more than £6bn in gross added value to UK economy last year
Betting and Gaming Council (BGC) CEO Grainne Hurst has warned that a rise in UK gambling taxes would strengthen the black market and destabilise the sector.
On 11 October, a report in The Guardian claimed the Treasury was exploring ideas from two think tanks, one of which, the Institute for Public Policy Research, suggested raising the remote gaming duty from 21% to 50%.
The same left-leaning think tank has claimed raising general betting duty from 15% to 30% of GGR would be of benefit to the UK, as it hit out at the gambling sector as a “product [that] causes harm”.
The news resulted in the shares of several UK-listed operators tumbling at the start of last week.
As well as Flutter CEO Peter Jackson and analysts, Hurst spoke out against the proposed tax hike, highlighting the negative impact it would have on the industry, including derailing the growth of the sector and a reduction in tax revenue.
The BGC chief has since elaborated on her earlier remarks, adding that new taxes would play into the hands of illegal operators, as she pointed to a new study on the benefit the gambling industry brings to the UK economy.
The report, published by EY, suggested that BGC member operators generated £6.8bn in gross value added (GVA) in 2023, with a direct contribution of £2.6bn and a further £2.9bn from indirect, supply chain activities.
The remaining £1.3bn in GVA arrived from “induced activities” from spending by those employed in the supply chain and by BGC members.
On the employment front, EY noted total full-time equivalents in 2023 from the sector amounted to 109,000, with 45,000 of those being direct.
Total taxes paid in 2023, as determined by EY, amounted to £2.8bn in a combination of betting and gaming duties and other taxes. In addition, indirect and induced activities from the sector contribute a further £1.2bn in tax.
Of the £2.8bn figure, EY said: “This contribution is almost three times the sector’s share of GVA, meaning that BGC members pay a larger share of tax relative to their share of total UK GVA than other sectors.”
In a statement, Hurst claimed that “comparable” markets around Europe witnessed an “immediate” rise in black market activity following tax increases – such as Sweden, where MPs called for a swift GGR tax reduction after it rose from 18% to 22% on 1 July.
Hurst also pointed to the BGC-commissioned Frontier Economics study which found 1.5 million Brits are spending up to £4.3bn on illegal operators.
Warning things could get worse with tax hikes, she said: “Our sector is at a crossroads as we seek to implement the measures contained in the white paper and deliver a new era of stability and growth so we can continue making significant economic contributions to the country.
“After so many years of uncertainty, this sector needs stability to deliver sustainable investment, not further change which threatens to undo that contribution.”
She added: “Any new taxes now, at any scale, at this critical juncture risks undermining that good work while giving a leg-up to the lurking menace of the black market, which is ready to hoover up disaffected customers sensitive to any degrading of the offer they get in the regulated sector.”
Touching on the findings from the EY study, Hurst said the betting and gaming sector would be a key proponent in the Labour government’s plans to drive investment and encourage business leaders to back the UK.
Prime Minister Keir Starmer hosted an international investment summit last week, in which he called on the business world to “back Britain” while he promised to rip up regulation and red tape to accelerate economic growth.
Hurst added: “Regulated betting and gaming remains a hugely popular pastime in this country, enjoyed safely by the overwhelming majority, while our members are a Great British export and genuine global leaders, delivering enormous economic good in city centres, on high streets and in the growing online sector.
“That investment positively impacts other sectors too, with BGC members pouring millions into Britain’s world leading sports.
“We want to partner with government to see the right, proportionate regulations, and a stable tax regime, which doesn’t hit customers, doesn’t raise the attraction of illegal operators, won’t risk jobs, but instead delivers on the government’s new growth agenda.”
Culture Secretary Lisa Nandy pushed back against the tax hike reports last week, saying: “You can’t believe everything that you read in the papers.”