Shares in Ladbrokes and Coral owner Entain PLC (LSE:ENT) and Grosvenor casino owner Rank Group PLC (LSE:RNK) fell after a report that slot machine shops and casinos could face a £460 million tax rise under a future Labour government led by Andy Burnham.
According to the Guardian, the Social Market Foundation has proposed doubling machine games duty from 20% to 40% on higher-stakes Category B machines, which allow £2 spins every 2.5 seconds.
The thinktank estimated the move could raise between £275 million and £458 million, on top of around £600 million currently paid by the sector.
The proposal would hit casinos and adult gaming centres, sometimes called “slot sheds”, which have expanded rapidly on UK high streets in recent years, particularly in more deprived areas.
Bookmakers would also be affected, which the Guardian said may have deterred current Chancellor Rachel Reeves from increasing the duty in November’s Budget because of concerns over the horse racing industry’s reliance on betting shop profits.
Burnham, the Greater Manchester mayor and possible future Labour leadership contender, has previously criticised adult gaming centres for “targeting some of the most vulnerable in our communities” and backed calls for tougher local licensing powers.
Industry groups rejected the idea. Bacta, representing the amusement arcades and low-stakes gaming industry, called the report “fantasy economics and grossly irresponsible”, warning that a 40% rate would cost jobs and drive customers towards the illegal market.
The Betting and Gaming Council said any increase would also put jobs at risk.
Entain was the main faller among the larger listed betting names, down 2% at 579.8p, while casino and bingo operator Rank slipped 2.1% to 101p.
Flutter Entertainment PLC (LSE:FLTR, NYSE:FLUT) was barely changed, down 0.2% at 7,782p, while William Hill owner Evoke PLC (LSE:EVOK) bucked the move with a 0.3% rise to 47.2p.
