The UK gaming industry has reacted angrily to the news that the government’s Machine Games Duty will not be set at a ‘revenue neutral’ rate.
In his Budget announcement on Wednesday, Chancellor George Osborne announced that the MGD standard rate is to be set at 20 per cent when it comes into effect on February 1, 2013.
However, the government had previously indicated to the industry that it would not be a revenue raising measure, with many operators predicting that it would most likely be set around 16 to 17 per cent.
Global Betting and Gaming Consultants said that the industry will “struggle to understand” how the duty rate of 20 per cent corresponds with the government’s earlier statements on the subject.
Responding to the announcement, Simon Thomas, chairman of the Hippodrome Casino in London, which is due to open this year, told InterGaming that any tax increase is “unwelcome.”
“Treasury said it was to be a tax neutral rate and it is disappointing, when the industry has made clear that the tax neutral rate is lower than 20 per cent, that they have gone for 20 per cent,” he said. “I only hope that they take this into account when they consider the Triennial Review so we have a chance of earning it back.”
GBGC also called for the government to apply the five per cent cut in the tax rate for the UK's top earners to be extended to the casino industry.
“While the government reduced the 50 per cent tax rate on top earners, it has left the 50 per cent tax on casinos,” said Warwick Bartlett, CEO of Global Betting and Gaming Consultants. “GBGC agrees with the government that 50 per cent tax is high on any sector of the economy, casinos included."
