Stewart Kenny, a co-founder of Paddy Power, has criticized betting companies for luring inexperienced gamblers into addictive games to boost their profits.
Having served on the board of the company for 29 years, Kenny alleges that he left when the company removed measures intended to assist gambling addicts.
During his testimony to the Commons Treasury committee, Kenny highlighted that bookmakers often offer players free spins for online casino games immediately after they open an account. He likened this practice to a scenario where a bar patron finishing a light drink is encouraged by the bartender to have a much stronger drink on the house.
Advocating for discouraging bookmakers from steering individuals from less addictive to more addictive forms of gambling, Kenny emphasized the need for action in this area. He, along with others, is supporting the call for higher taxes on gambling firms in the upcoming Budget, led by Chancellor Rachel Reeves.
A study commissioned by the Betting and Gaming Council warned that proposed tax increases could result in the loss of 40,000 jobs and a potential £8.4 billion shift to the black market.
Kenny highlighted the significant rise in profits for gambling companies and dismissed industry assertions that elevated taxes would push individuals towards unregulated competitors as fear-mongering.
Carsten Jung, from the Institute for Public Policy Research, suggested higher taxation for gambling firms to offset the societal harm they create, particularly through high addiction rates, especially among young men, impacting finances and social interactions.
Jung recommended increasing remote gambling duty from 21% to 50%, machine games duty from 20% to 50%, and general betting duty from 15% to 25% to generate an estimated £3.2 billion.
Dr. Theo Bertram, director of the Social Market Foundation, proposed focusing tax hikes on online slot machines and casinos, protecting traditional horse racing betting. He emphasized the surge in remote gaming during the COVID-19 period and the need to address this trend effectively.
Members of Parliament were informed that the average betting levy across the industry stands at 22%, with exemptions from VAT. According to Stephen Hodgson, chair of the Betting and Gaming Council’s tax committee, the actual tax rate exceeds 65% when all applicable taxes are considered.
Grainne Hurst, the CEO of the Betting and Gaming Council, defended the industry by citing the large number of punters engaging in gambling activities monthly. She refuted claims of widespread social harm, stating that the vast majority of customers gamble responsibly, with only a small fraction experiencing gambling-related problems.
Hurst cautioned that increased taxes could lead to reduced odds for punters, potentially driving them towards illicit gambling operators. She emphasized the principle that higher taxation often results in decreased consumption and altered consumer behavior.
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