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UK – Jenningsbet’s Head of Safer Gambling highlights how independent bookies are at real risk from ‘hypothecated tax’

By - 24 January 2024

For over two decades bookmakers like Jenningsbet have been proud to pay their part supporting a voluntary levy which funds excellent charities tackling gambling related harm.

Vicky Knight, Head of Safer Gambling, Jenningsbet, said: “This is unique to our sector, raising millions for some exceptional charities, and I believe it works. We absolutely want to keep contributing to the levy so those charities can continue their vital work. But worrying new moves from the Government might actually hinder our ability to do that, instead of helping.”

In October, following the publication of the Gambling Act White Paper, the Government announced a consultation on a new ‘hypothecated tax’ in the form of a mandatory levy to raise funds for Research, Prevention and Treatment to tackle gambling related harm.

While broadly welcomed, it contained a sting in the tail for independent retail bookmakers like Jenningsbet, which face being charged disproportionately high levy costs which, if enforced, could threaten shop closures and job losses.

Ms Knight said: “That would be devastating for operators like us, which are the beating heart of many hard-pressed high streets, offering community to customers, and bringing in much needed investment both locally and nationally.”

There are currently just 536 independent betting shops remaining in this country, employing around 3,000 people, generating £5.5m in business rates and over £25m in taxes. But it’s not been easy of late, and the tough economic headwinds have taken their toll.

There were nearly 696 independent betting shops at the start of 2019, 160 have since closed, a reduction of around 23 per cent.

Meanwhile, in 2018 there were 145 independent bookmaker businesses, those which own chains, just like Jenningsbet. Now there are just 82. This is a loss of over 60 small businesses, 43 per cent of the total, in just five years. This is the loss of businesses that play an important role on the high street, a study by ESA Retail found that 89 per cent of betting shop customers combine their trip to the bookies with visits to other local businesses.

Ms Knight explained: “It is under that context that the Government wishes to increase our donations to the new levy to 0.4 per cent of Gross Gambling Yield, under a sliding scale which should take into account the diversity of businesses operating in the regulating betting and gaming sector. Our standards body, the Betting and Gaming Council, estimates that 492 bookies, across 38 businesses, will be impacted by a 0.4 per cent Levy. It might not seem like a lot, but independent bookmaker’s margins are simply not big enough to swallow that fee, on top of all their other costs, without risking closures and job losses.”

And the pill become even more bitter when compared to the Government’s approach to sectors that are similar to independent bookies. As of March 2022, there were 406 Adult Gaming Centres and 115 Family Entertainment Centres in this country, that’s 521 in total. Yet these premises are exempt from the uplift to 0.4 per cent and will instead pay 0.1 per cent.

Ms Knight argues: “We both operate on the high street, and have similar operating costs and pressures, yet independent bookmakers are expected to contribute four times more. It gets even more galling when you consider the behemoth that is the National Lottery. Their contribution to the levy over the last three years has been approximately 0.01 per cent of annual Gross Gambling Yield. This equates to an average donation of around £440,000 each year on GGY of around £3.5bn.

“That is tiny when you consider the entire sector, large and small, land-based and online, contributed in excess of £50m to the levy between 2022/23,” she added. “That money does real good. Rates of problem gambling remain low and stable in this country, at approximately 0.4 per cent of England’s adult population according to the most recent NHS Health Survey.”

But when people do struggle, it is often the network of charities funded by the levy which comes to their aid. In fact, around 85 per cent of all problem gamblers receiving treatment in Great Britain are treated by the third sector.

Ms Knight said: “Independent bookies like Jenningsbet aren’t in a position to contribute millions, but we are proud of the contribution that we and our staff make. However, if all independent bookies are unfairly targeted with a higher levy than our peers, it will inevitably push some shops into unprofitability. That will mean further closures and job losses.

“We want to pay our fair share, just as we’ve done for the last 20 years, but Government must listen to the concerns of independent bookmakers if they want to get reforms right. Supporting the levy can’t come at the cost of closed shops and sacked staff.”

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