Analysts Regulus Partners have cast doubt on the legitimacy of claims put forward by MPs that increasing UK gambling taxes would generate £2.9bn for the public coffers, stating the estimate relies on selective interpretation of data and misleading comparisons to international markets.
Regulus Partners has raised questions regarding the recent suggestion by MPs that doubling betting taxes could generate £2.9bn to alleviate child poverty, stating the assumption is based on misleading interpretation of data.
The claims were made by 100 Labour backbenchers in an open letter to the Chancellor last week, however analysts at the strategic advisory firm calculated that increasing GBD to 30 percent and RGD to 50 percent would in fact deliver closer to £2.1bn – almost 30 percent less than the campaigning MPs say.
“To reach the higher figures cited, additional increases recommended by the IPPR think-tank – such as raising Machine Games Duty to 50 percent and hiking casino duty bands – must be included, though these are not explicitly acknowledged in the MPs’ proposals,” reported gaming journal Next.io.
“This discrepancy has led some to suggest that the recommendations are based on confusion or selective interpretation of the data. Critics also argue that the letter conflates revenue with profitability, ignoring the thin operating margins of many gambling businesses.”
Increasing MGD would add an estimated £350m to the outgoings of UK retail betting shops, while the GBD increase would cost £116m, with the proposed tax rises projected to be 1.3 times current profit figures.
“For shops to survive, they would need to be making Ebitda margins in excess of 30 percent just to absorb a tax hit of this magnitude, which is not the reality for the vast majority of high street shops,” said Regulus’ Paul Leyland.
MPs also cited the high taxes that exist in The Netherlands, Austria and France as justification for an increase, however Regulus wrote that these regions have also experienced a steep increase in black market use.
Damage unlimited
Paul Leyland said… “For shops to survive, they would need to be making Ebitda margins in excess of 30 percent just to absorb a tax hit of this magnitude, which is not the reality for the vast majority of high street shops…
Tax yourselves you mf-ers … you’re the ones who voted for child poverty policies in the first place
In blunt terms, the backbench MPs have shown a staggering degree of economic illiteracy in their latest tax call, more worringly so given that the dodgy math model they’ve applied has been selectively plucked on emotion rather than economic points.
If protecting children from poverty is indeed the motivation, then a doubling of tax on the energy companies whose extortionate pricing policies are actually going to freeze the poorest children this winter would have been more appropriate. Gambling is a player’s choice; heating your home isn’t.
Nor have they considered higher taxation on the raging profits of banks who are literally taking the homes away from poorer children through repossessions. Nor, indeed, the tech bros who are putting children in harm’s way through online pornography and grooming opportunities. Meta, for example, paid £29m in tax to the UK Treasury according to the Guardian. Last year it reported a record £3.3bn in sales.
These 100 MPs haven’t made any of those connections. And most important of all, they certainly wouldn’t make the connection that it was them – British MPs – that shoved children in poverty’s way when they voted for the child benefit cap policy in the first place.Perhaps they should do the moral thing and tax themselves more heavily?
No, for this parliamentary rabble, it’s just the gambling business which should pay – much of which which is land based, highly regulated and already this year coughing up £100m from the Statutory Levy for NHS programmes.
But that’s just Coinslot contempt spewing forth emotive arguments. For the intellectual analysis, take note of the Regulus commentary – it makes sound economic sense. The backbench MPs, however, just make sound and nonsense.
