Genting Closure Raises Fears Gambling Tax Warnings Are Coming True

Genting Casinos has confirmed it’s closing its Coventry venue. This move puts 51 jobs at risk and adds fresh weight to warnings about the financial pressure facing gambling venues.

Genting said the venue is no longer commercially viable, citing years of rising:

• Employment costs
• Business rates
• Energy bills
• Regulatory costs
• Gambling taxation

On the face of it, this closure could be viewed as an isolated business decision. However, it comes on the same day that new modelling from Regulus Partners appeared. This modelling warned that thousands of betting shops could disappear if Machine Games Duty is increased in the upcoming Budget.

The figures are forecasts rather than confirmed outcomes. However, the timing is difficult to ignore. Voices of the gambling industry have repeatedly warned that higher costs and taxes will lead to physical venues closing. Genting Coventry provides a real example of exactly that type of pressure.

Genting Says Coventry Casino Is No Longer Viable

Genting's Coventry casino opened in 2012 and currently employs 51 people. It blamed ‘commercial pressures facing the land-based casino sector’ for its closure. Genting pointed to substantial increases in costs, including regulatory compliance expenditure and gaming taxation.

The operator said those pressures have reduced margins and made it increasingly difficult for regulated venues to remain commercially sustainable.

Interestingly, the operator also directly linked the closure to the wider debate around gambling tax. Although no further Machine Games Duty increase has yet been announced, Genting warned that an increase in the upcoming Budget could result in more casinos closing and further job losses.

Machine Games Duty currently has three rates. The lower rate is 5%, the standard rate is 20% and the higher rate is 25%. The rate payable depends on the cost of play and prizes available on a machine.

Genting's warning comes ahead of the Budget on October 28 and amid calls for the government to raise those rates.

Regulus Warns 4,050 Betting Shops Could Close

The scale of the industry's concern became crystal clear on the publishing of Regulus Partners’ modelling.

The modelling was based on what could happen if the standard rate of Machine Games Duty doubled from 20% to 40%. Regulus estimated that around 4,050 additional betting shops could close within three years.

That would leave approximately 1,500 shops operating across Britain and could result in as many as 28,000 job losses.

Regulus argues that an increase from 20% to 40% would add roughly £45,000 to the annual cost of an average betting shop, effectively wiping out its free cash flow. Not only that, it suggests the doubling of MGD could have the unintentional effect of causing tax receipts to fall by 32%.

Could British Racing Also Lose Out?

It almost goes without saying that mass betting shop closures would cause a ripple effect. Caught in that ripple could be, according to Regulus, the British racing industry.

It estimates that British racing could lose around £92 million every year if MGD rises to 40%. That’s equivalent to roughly a third of the sport's current income from betting.

Each betting shop closure is estimated to cost racing around £6,000 in Horserace Betting Levy contributions, alongside a substantially larger loss through payments for racing media rights.

The British Horseracing Authority has already urged the government to consider the secondary effects of any further gambling tax increases.