John O’Reilly is chief executive of Rank Group, which owns Mecca Bingo and Grosvenor Casinos and other gambling brands.
Bingo halls and casinos are a much-loved and vital part of towns and cities throughout Britain – providing jobs and entertainment for local communities and a lorry load of tax revenues for the Exchequer.
But all of this – along with the biggest investment programme in our long and distinguished history – is now under threat as talk of a gambling tax raid in the Budget swirls.
Put simply, if the Chancellor raises machine gaming duty – the tax paid on slot machines – it will bring Rank’s nationwide investment to a shuddering halt, with closures and job losses along the way.
J. Arthur Rank founded the company in 1937 and we’ve been entertaining the nation ever since. Today, Rank is the biggest casino operator in the UK with 50 Grosvenor venues in most big towns and cities in the UK; we also run 50 Mecca bingo clubs.
Gambling is what we do, and what we’re proud to do. We employ 7,800 people, we love hosting the millions of customers who come to our clubs each year, and we have an unshakable commitment to safer gambling.
In our most recent financial year, Rank made £44.6million in profit after tax. In the same period, we paid £188million in UK taxes and business rates. Broadly, for every £5 we made pre-tax, we paid £4 in tax. As the Budget approaches, I read that we must, quite rightly, pay our ‘fair share’ in tax. I believe we do just that.
Taxes on gaming machines could close bingo venues, says Rank Group chief executive John O’Reilly.
I recognise that not everyone likes gambling. I understand that some people frown on those who choose to spend their money having a bet.
That’s fair enough. But, like it or not, millions of people in the UK, including me, do love to bet, and when they visit our casinos and bingo clubs, they do so safely. And let’s be crystal clear, these venues are only economically viable thanks to gaming machines.
Some commentators fail to grasp the fundamental make-up of a casino but, without machines, there is no viable business. The same is true of bingo. Popular slot machines, enjoyed by millions of visitors in our clubs, keep the show on the road.
Slot machines help keep Mecca Bingo in business
The average expenditure on a gaming machine in one of our bingo clubs is just £13 per customer visit. And yet, increasing taxes on these machines will lead to the closure of much-loved bingo clubs that are often the beating heart of local communities.
Britain should be proud of our bingo clubs, not looking to tax them into extinction. The Government should be delighted that labour-intensive casinos are ready to invest hundreds of millions of pounds in leisure and hospitality facilities for British consumers and for tourists visiting the UK, rather than whipping away that opportunity and sending us hurtling into reverse.
For too long, snobbery and ill-informed posturing have been allowed to permeate the discussion around the gambling industry, leading to a hopelessly misguided idea that gambling is somehow an easy hit for tax increases.
It is not. It would slam the brakes on the £60million of investment that Rank has planned for towns and cities across Britain.
Increasing machine gaming duty from 20 to 25 per cent would likely see us having to shut a third of our casinos and an even higher proportion of our bingo clubs. Between them, over 2,500 jobs would go. It is senseless.
Those who annually clamour for gambling firms to pay more in tax can often scarcely disguise their underlying disdain for gambling. Perhaps, deep down, they just don’t like what we do, and they’re perfectly entitled to that position, of course.
But in their haste to impose crippling tax rises on the regulated sector, they play straight into the hands of illegal operators who will be watching the Budget with breathless anticipation. If the Chancellor raises gambling taxes, the rounds of applause will come from those illegal operators who pay no tax.
My plea to the Chancellor is that by providing a pro-business tax environment for, quite rightly, highly regulated businesses like ours, we can continue on a growth trajectory, delivering the ear-marked investment which will create jobs in our towns and cities.
We want to be part of the growth solution for UK plc rather than sink into a doom-loop of club closures and job losses.
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