International edition
June 15, 2021

According to BISL

Machines Games Duty rate will hit pub gaming

(UK).- Business in Sport and Leisure (BISL) is disappointed at this week’s announcement by the Government that the higher rate of Machines Games Duty (MGD) is to be set at 20 percent, and is calling for an immediate review of the financial calculations which led Government to settle at this punitive rate.

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ISL fear that the high rate introduced will damage the majority of gambling operators leading to a reduction in the number of sited machines, job losses and business closures throughout the supply chain.

Despite the government’s reassurances that they were aiming to find an MGD rate which would be revenue-neutral, the rate of 20 percent does not equate to neutrality, according to independent figures. Analysis by Ernst & Young and RSBM, consistent with Treasury’s scorecard approach, concluded that the revenue neutral rate across all sectors would be 16 percent.

Simon Johnson, CEO of BISL, said: “We believe that this rate is not revenue neutral and threatens to be enormously damaging for the vast majority of gambling operators. The Morning Advertiser Pub Market Report published last month showed a 2% decline in the number of pubs with AWPs down to 54% and we fear that MGD will hasten that decline further.” 

He added: “This decision appears to be simply the next step in an ongoing sustained assault on the low stake gambling industry.  Instead of looking at how the industry can help the economy grow, politicians have looked at how the industry can help tackle the Government’s deficit problem. Ironically, in the long term this high tax rate will lead to falling revenues for the Treasury.”

Johnson continued: “The broadly based leisure industry has a crucial role to play in terms of delivering growth and economic recovery in the UK. It is a crying shame that the Government has ignored the potential of this sector and installed what is an aggressive and highly punitive tax rate.”

“Independent figures suggest that the rate of MGD ought be set at 16 per cent to ensure revenue neutrality so we call for an immediate review of the figures which Government used to come to this dangerous and damaging rate,” he concluded.

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