Leaked SMF Draft Queries Machine Games Duty Claims
A draft of the Social Market Foundation's report calling for Machine Games Duty to double has surfaced online with internal staff comments still attached, days before the Budget.
The comments query how confident the authors can be that workers who lose jobs will find new ones. The leak adds to an argument already running hard over whether the Chancellor should raise duty on gaming machines, which we have followed in our coverage of the Chancellor weighing a doubling of the duty.
What The Leak Shows
The political site Guido Fawkes published the draft on 20 October, as iGamingExpert reported. The report, Addressing the Harm, was published by the SMF in June and written by Gideon Salutin and Richard Hyde. It calls for the duty on Category B machines to rise from 20% to 40%, which the SMF estimates would raise between £275m and £458m a year. You can read the final version on the SMF website.
In one margin comment, SMF director Theo Bertram asked whether it was overly optimistic to say people who lose jobs through venue closures will find work elsewhere, and what the basis was for that confidence.
City AM reports that Salutin, the SMF's chief economist, replied that the analysis does not guarantee individual workers will find other jobs, but shows employment across the country will grow, and that he thought the wording was right.
iGamingWorld reports a second exchange, in which Bertram warned against overstating a link to crime and Salutin changed the wording to correlation. The draft also acknowledges that bingo halls and seaside arcades would be affected.
The Claims Behind The Proposal
The SMF's argument is that current tax does not cover the cost of harm from gaming machines. iGamingExpert reports that the report puts those costs at £669m a year, against £607.5m of tax revenue in 2024-25, and that it projects a 10% fall in gambling spending, around £1bn, would create 24,000 jobs as consumers spend elsewhere. The comments are an editing record: they show claims being questioned and reworded, and the report's published headline estimate remains £275m to £458m.
The Betting and Gaming Council told City AM that the reported comments raise serious questions about the evidence used to justify tax rises and whether the consequences for jobs, businesses and high streets have been properly considered.
It points to modelling it commissioned from EY, which estimates that doubling the duty could put almost 1,500 betting shops and 34 casinos at risk, cost up to 16,000 jobs and leave the Treasury £124m worse off. Those forecasts are contested, and supporters of higher duties argue the tax could raise significant revenue and reduce gambling harm.
Casino Games Hub
Cutting Back
Operators are already cutting back. Evoke, which owns William Hill, said it closed 270 shops over the past year, and reported third-quarter revenue down 7% to £406m.
Industry bodies have also warned that bingo and arcade firms face closure risks if the duty rises, and 90 Labour MPs have urged a higher rate.
Chancellor John Healey delivers the Budget on Wednesday 28 October, and a rise in Machine Games Duty is widely expected.
The reports we reviewed do not include a response from the SMF to the leak. Readers following the debate can see how the sector is affected in our guide to UK betting sites.
