After a bumper time at the Cheltenham Festival last week, the bookmakers have been brought back down to earth with a bit of a bashing by the Chancellor in the Budget today.
The Daily Mail’s long-running but mathematically challenged campaign against fixed odds betting terminals (FOBTs/B2) has borne fruit. The rate of duty will be increased on FOBTs to 25% from 20%. This will be done by creating a new higher rate of machine games duty (MGD). The DCMS will also report on the regulation of B2 machines before Easter.
(Note: MGD has not actually been force for a full calendar year yet (introduced 1 February 2013))
In the wake of the announcement William Hill’s shares have fallen 6% on Wednesday; Ladbrokes by 13% ( as at 2pm).
“After a bumper time at the Cheltenham Festival last week, the bookmakers have been brought back down to earth with a bit of a bashing by the Chancellor in the Budget today. Bookmakers with retail estates will face higher costs with the new 25% MGD on FOBTs and those with offshore sports books will be paying additional levies on their UK horseracing gross profits.”
“Turning to gambling duties.
Fixed odds betting terminals have proliferated since gambling laws were liberalised almost a decade ago.
These machines are highly lucrative, and therefore it’s right we now raise the duty on them to 25%.
We will also extend the horserace betting levy to bookmakers who are based offshore.
And we’ll look at wider levy reform and at introducing a ‘racing right’ to support the sport.
While betting machines have grown, the number of bingo halls has plummetted by three quarters over the last thirty years. Yet bingo duty has been set at the high rate of 20%.
…my Honourable Friend for Harlow has turned his energy and talent into a vigorous campaign to cut bingo duty – ably assisted by my Honourable Friend for Waveney.
They want the rate cut to 15%. I can go further. Bingo duty will be halved to 10% to protect jobs and protect communities.”