Arcades, pubs and LBOs slam MGD

27/03/2012

The UK arcade, betting and pub industries have come out strongly against the new Machine Games Duty rate of 20% announced in last month’s Budget by Chancellor George Osborne.

BACTA Chairman Derek Petrie said: “It’s inconceivable that a Government supposedly committed to small business and to tourism has made this decision.” He warned that the new tax could lead to widespread arcade closures.

The British Beer and Pub association has estimated that the tax payable on fruit machines in its members’ pubs will cost the sector an extra £14m.

A blow for pubs is the inclusion of SWP (skill with prizes) machines in the new tax regime. Previously SWPs paid no amusement machine licence duty.

BBPA chief executive Brigid Simmonds said: “This is a bitter blow. For this new tax to be revenue neutral it should not have been more than 15%. It will cost the pub sector £14m in extra taxes next year. Fruit machines and quiz machines are an important part of the fabric of British pubs, a vital income stream, and valued by customers.”

The Association of British Bookmakers believes that the increase will put 11,000 jobs at risk at about 2,600 betting shops across the UK. Simon Davies, analyst at brokers Collins Stewart, said the MGD would hit William Hill profits by around £11 million in the first year while Ladbrokes can expect a £14 million impact.

 

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