The Victorian government may have changed its mind about increasing gambling taxes for poker machine clubs, but the same cannot be said about politicians overseas. This week, British politicians decided to raise taxes of Fixed Odds Betting Terminal (FOBTs) gaming machines which are popular in betting shops. The tax increase will see bookmakers paying 5% more on their gaming machine profits.
This will take the current tax of 20% up to 25%. The law has been passed as a response to criticism of the games, as responsible gambling advocates believe that FOBTs are addictive and harmful. However, some groups are not entirely sure that the tax increase will do anything to curb problem gambling rates. “Bookmakers will still be raking in huge sums,” says Adrian Parkinson of the Campaign for Fairer Gambling.
“The government should be looking at dealing with the root of the problem: the high stakes and high intensity play of FOBTs, rather than tax the losses of those addicted to them.” As expected, bookmakers are also displeased with the decision to increase gaming machine taxes. William Hill stated that the tax increase would have cost the company £16 million ($17 million AUD) if the law was passed year.
Companies like Ladbrokes will face even larger losses, because they rely more on income from betting shops and FOBTs than William Hill and Paddy Power, which have strong online gambling sites. Shareholders are also reacting negatively to the news. Since the news of the tax increase was announced, shares for UK bookmakers plummeted.
In just one day, William Hill’s price dropped by 7% while Ladbrokes price’s declined by 14%.
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