Stealth taxes are a new phenomenon worldwide. While they have existed for years, it is only now that it has been named and brought to the attention of the public. An example of these underhanded "stealth taxes" that we have all experienced is when a consumable product costs the same, the packaging is the same size, but there is an almost imperceptible drop in the amount of the product in the box.

The Betting and Gaming Council (BGC) has accused the British government of implementing just such a nefarious increase in costs for casinos in the United Kingdom after reviewing a Whitepaper-related proposal by Jeremy Hunt, the chancellor of the exchequer.

An Invisible Tax Worth £25 Million

Betting and Gaming Council CEO has been vocal about the decision by the Treasury to freeze the Gaming Duty Bands applied to local casino and betting revenues.

Michael Dugher said:

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“Freezing Gaming Duty Bands is a stealth tax which has the potential to slow recovery and weaken future growth. Removing it would have provided a welcome boost for the land-based casino sector at a crucial time.”

According to the research provided by the BGC, the freeze in taxation bands prevents the industry from benefiting from lower fees based on their margins. The net result of this one-tax-fits-all approach is a £25 million increase in taxes over the next five years.

What makes this debilitating cost increase so infuriating to the affected businesses is that the government can hold its hands up and publicly report that it is increasing revenues without raising taxes. While this is technically true, it is also a blatant misrepresentation of the facts.

 UK Casinos Starting to Close Up Shop

Dugher lamented the fact that while UK casinos added  £300 million annually to the national coffers and a further £800 million to the broader economy, it is being suppressed by the government.

Dugher explains:

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“Right now, casinos, which play such a vital role in the tourism and hospitality sector, are waiting for the modest but mission-critical policy changes announced in the White Paper. It seems short-sighted to maintain this stealth tax while failing to make changes that will allow casinos to hire and grow.”

Calling on the government to review the impact on the casino sector in the short and long term, Dugher said:

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“The BGC urges a re-think so Gaming Duty Bands can be moved with inflation at the next opportunity.”

This urgent appeal for a business-minded review is based on the fact that this flat tax approach is adding undue strain on the sector already beginning to show signs of stress. These businesses need to be able to post a profit in order to grow, and at the moment, they are being crushed by rising inflation, increasing salary expectations, and a stealth tax increase.

According to the BGC, the local gambling sector has already seen a 25% job loss over the past four years. The industry faces even more layoffs as four casinos have closed in recent months, with more considering the possibility should some form of financial relief not become available to them.