The co-founder of Paddy Power has accused betting companies of luring inexperienced gamblers into addictive activities to boost their profits. Stewart Kenny, who served on the board for 29 years, alleges that the company abandoned safeguards meant to assist problem gamblers.
In testimony to the Commons Treasury committee, Kenny criticized the practice of offering free spins for online casino games shortly after account registration, likening it to a bartender encouraging a customer to switch from a mild drink to a strong one. He emphasized the need to deter bookmakers from steering individuals towards more addictive forms of gambling.
Advocates, including Kenny, are urging Chancellor Rachel Reeves to impose higher taxes on gambling firms in the upcoming Budget. A study commissioned by the Betting and Gaming Council warned that proposed tax hikes could lead to job losses and drive billions of pounds of revenue into the illicit market.
According to Kenny, gambling companies have seen a significant rise in profits, dismissing industry claims that increased taxes would push customers towards illegal competitors as fearmongering. Experts from the Institute for Public Policy Research support higher taxes on gambling firms to offset the societal harm caused by addiction, especially among young men.
The focus, according to Carsten Jung of the IPPR, should be on raising duties for remote gambling rather than traditional horse racing betting. Proposed tax adjustments include increasing remote gambling duty from 21% to 50%, machine games duty from 20% to 50%, and general betting duty from 15% to 25%, with the aim of generating £3.2 billion.
Dr. Theo Bertram of the Social Market Foundation suggested that online slot machines and casinos should face steeper tax hikes, protecting horse racing betting. Independent research cited by Bertram challenges the notion that higher taxes would drive individuals to illicit gambling operators.
During discussions, it was revealed that the average betting levy across the industry is 22% and exempt from VAT. The Betting and Gaming Council’s tax committee chair, Stephen Hodgson, highlighted that the actual tax rate exceeds 65% when considering all taxes.
Grainne Hurst, CEO of the Betting and Gaming Council, defended the industry, pointing out that millions of punters engage in gambling activities without issues. She disputed claims of widespread social harm, citing a low 0.4% rate of problem gambling among customers.
Hurst cautioned that increased taxes could lead to poorer odds for bettors, potentially pushing them towards unregulated betting platforms. She emphasized the principle that higher taxation typically results in decreased consumer activity and behavior changes.