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BGC Calls For the Modernisation of the UK Gambling Market
By Shane Addinall Jan 04, 2024 IndustryDiscover the pressing issues confronting the UK casino industry as highlighted by the BGC's call for modernisation. These challenges include potential tax burdens and the significant impact of the 2024 National Living Wage increase due in April.Last year, the Betting and Gaming Council CEO Michael Dugher took the British government to task over its impending stealth tax.
While there was no tax increase, they had proposed freezing the application of revenue bands, which brings tax relief to lower-earning operations. It was estimated this silent levy would cost the land-based casino sector in the UK £25 million over a five-year period.
Challenging Times Await UK Casinos
David Williams, the Director of Public Affairs for the Rank Group, revealed that the imminent 9.8% National Living Wage increase would have an even more significant annualised impact on them and other gambling groups than the proposed silent tax.
Williams clarified the impact of the increase, saying:
Quote“People are, quite rightly, the biggest and most important cost line in our business. That is exactly how it should be, and our brilliant colleagues in our clubs are what make the difference, and they are why our customers continue to keep coming back. Even so, the National Living Wage increase will come at a cost of almost £10 million to the Rank Group (both our Grosvenor casinos and Mecca bingo clubs) on an annualised basis.”
While he recognises the importance of paying staff well, he revealed that the group has run at a statutory loss in recent times, saying:
Quote“Our most recent full-year results (to June 2023) saw the Group make a like-for-like trading EBIT of just £20.3 million and a statutory loss after balance sheet right downs and venue closure costs of £95.3m.”
The hits don't stop coming as the British gambling industry will also become responsible for a statutory Levy over the next few years, which will see the company paying more than 300% more than it currently does towards research, prevention, and treatment of gambling-related harms.
The Gambling Niche Needs Modernisation
In most markets, the customer would feel the impact of cost increases. However, as Williams says, gambling is not like most other markets. He flippantly but correctly remarked that casinos cannot "sell a £10 chip for £11.20” to cover costs.
Williams called on the UK Gambling Commission to deliver on its promised White Paper, which, it is hoped, will address some of the industry's current shortcomings:
Quote“The key mitigation that we have against these pressures is the delivery of the public policies in the White Paper, some of which will really make a positive difference." - "...the industry is urging the Government to keep its foot to the floor in delivering their response to the land-based consultation, laying the necessary statutory instruments and getting the legislation delivered in the first half of 2024."
Three of the expected changes are:
- The long-overdue change to gaming machine allocations.
- Casinos being able to offer on-site sports betting.
- Advancements in electronic payment methods (rather than an over-reliance on cash).
The reality of the market is that they can see the timer counting down to increased costs but feel that the support they need from the government to keep the sector in the black is nowhere near.
Williams drives this point home, saying:
Quote“It all takes time, and whilst timing is everything, we are not blessed with time on our side.”
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