BGC and SMF clash over raising tax on machine games

• BGC and SMF clash over their interpretation of whether the Machine Games Duty ought to be raised
• The BGC insists that the SMF is ignoring certain ramifications of raising the Machine Games Duty
• The SMF holds its own, and argues that taxing gambling more heavily would result in better outcomes for communities, with the most deprived areas facing six times more Category B slot machines

The Social Market Foundation (SMF) and the Betting and Gaming Council have expressed differing opinions on whether the government, or a potentially new Prime Minister, should raise Machine Games Duty.

The SMF, which has been floating the idea for a while now, believes that the most harmful machines, Category B, must be taxed appropriately, and that the rate is long overdue for an adjustment.

The most harmful machines must be taxed with an updated tax levy

The Machine Games Duty was originally introduced in 2013, and it has not been set at a level "to account for the higher economic, social, and fiscal harms associated with machine gaming relative to other types of land-based gambling," the SMF wrote in a six-point statement about the need for raising the tax.

The SMF further argued that despite the harm of EGMs, there has been a notable increase in such machines in areas specifically affected by social deprivation, which further compounds the issue and requires a timely intervention.

There are six times as many AGCs in the most deprived areas as there are in the least deprived ones, based on population, suggesting that there is stronger demand for these products in places where people are economically challenged and financially struggling.

The SMF has illustrated its point through a specific estimate of the costs associated with these machines, arguing that the economic losses are worth at least £2.33bn, and that includes £669m paid through welfare, housing, health payments and crime.

The BGC has, for its part, pushed back and has insisted that the gaming sector supports around 109,000 jobs, and contributes billions to the UK economy, a well-established line of reasoning for the trade group

BGC calls the line of reasoning put forward by the SMF, arguing that it omits important facts

"Doubling Machine Games Duty would not protect those communities. It would force venue closures, cost jobs and weaken high streets, while benefiting only the growing illegal gambling market, which pays no tax, contributes nothing to local communities and offers none of the consumer protections found in the regulated sector," the BGC added, and took issue with the fact that SMF’s report did not try to also estimate the costs of closing down venues hosting those machines as well as the associated job losses, and how that would impact communities.

The BGC also pointed out what it saw as a logical inconsistency in the report, arguing that SMF cited that across demographics and the political spectrum, the majority of people were still opposed to raising taxes.

The SMF, though, has in a way addressed the knock-on impact of closing down venues, arguing that it would lead to other high street opportunities, and explaining that £1m in consumer spending on retail or food usually generates £600,000 in tax windfall, compared to £500,000, while also similarly failing to lead to gambling-related issues.

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