Sascha Blodau, General Manager MERKUR UK, argues that investors need confidence and clarity on government decisions and explains why businesses find it difficult to grow over the long-term if they are not part of a growing economy. Whilst acknowledging the importance of maintaining the rate of MGD, he points out that the industry is crying out for the modernisation measures set out in the white paper to be delivered.

Coinslot: It was the government’s first budget of their new term – what were the key stand-outs for the industry and business in general?

Sascha Blodau: The costs of running a business will be significantly impacted by this budget. An  increase in NI from 13.8 to 15 percent paid  by the employer and changes to  the minimum wage can only come from profit. Of the £40 bn of extra tax more than 50 percent will come from business and only time will tell if the private sector can really afford this additional burden. 

On the plus side we were pleased that the rate of MGD was not changed and we are grateful to Bacta for the work it undertook to make the Treasury aware of the enormous impact a change to this rate would have had. 

Coinslot: Threats or opportunities? How will your members be weighing up the chancellor’s offerings?  

Sascha Blodau:  We are a long term investor in the UK. We have invested over £500m to date and expect this to continue, but we need the right business environment and more specifically the right business environment for our sector which faces some unique challenges. 

This is not a 5-year budget as we can see from the growth in GDP forecasts. It’s a 10-year budget as the infrastructure proposals set out will take many years to complete and the benefits will then take longer to be seen. 

Business needs to work on shorter time horizons and need government to provide a pathway to further investment by expediting the white paper, review stakes and prizes and not burden the sector with damaging changes to technical standards – changes which have not been costed or based on any published evidence. 

We need confidence and clarity on some key government decisions, we simply cannot base significant investment decisions on what may happen. 

It does however seem that the Chancellor has recognised the importance of the hospitality and entertainment sector but we need more focus on the contribution our sector makes, including high street gaming centres, bingo clubs and coastal arcades.

Coinslot: Is this a budget for growth or does it signal concerns for business investment and development over the coming year?  

Sascha Blodau:The Chancellor has certainly put a £100 bn bet on a single number – it’s difficult to see what the economy will look like if the growth predictions are not realised. 

Businesses find it difficult to grow long-term if they are not part of an economy which is growing – it’s the difference between walking up or down hill: we have to back the government and work with it to achieve this long term strategy. 

Coinslot: There was a mixed bag in terms of concessions from the chancellor. Given the delay in the Gambling Review and a number of areas still to be determined, do you think the budget has presented the industry with a strong case for greater urgency, expanded modernisation and more incentives for economic growth in the final Review?    

Sascha Blodau Absolutely yes. We have said so many times that we are probably the only industry that cannot pass any of its costs on to its customers. 

We need the modernisation measures set out in the white paper to be delivered. 

We then need to have a meaningful discussion about stakes and prizes for our high street gaming centres, our distribution company and single site business while supporting the important pub retail sector. We will continue to work alongside our trade association to lobby on these vital issues.

Coinslot: Where do you think the Budget will have most impact on the industry – the high street, seaside towns, the supply chain, arcades, pubs, employment, R&D…?    

Sascha Blodau: By increasing the costs of running a business this is a budget that will impact every area in which we operate. It’s as simple as that.