Genting Threatens to Close 13 of Its 32 UK Casinos Over Budget Tax Plan

^{Genting Casinos UK has told the Treasury that doubling machine games duty would make 13 of its 32 venues unsustainable. (Photo: N Chadwick / Wikimedia Commons)}

Genting Casinos UK has drawn up plans to close 13 of its 32 British casinos if the Chancellor doubles the tax on gaming machines in this month's Budget.

Paul Willcock, chief executive of Genting UK, said the 13 venues would become "unprofitable or unsustainable" if the Treasury raises machine games duty from 20% to 40%, putting roughly 900 jobs at risk out of the company's more than 3,000 UK staff.

A £16m Hit to a Company That Made £13.5m Last Year

Willcock said the increase would add about £16m a year to Genting's cost base, more than the company's entire £13.5m post-tax profit last year, as the industry steps up its campaign against the levy ahead of the Budget.

The Treasury is weighing the jump in machine games duty, a levy on fixed-odds terminals offering games such as roulette and blackjack, after the Social Market Foundation think tank proposed the change in July, according to the Telegraph. The policy could lift machine games duty revenue from about £600m to as much as £1bn a year.

Rank and Entain Also Warn of Closures

Genting is the second major casino operator in a week to warn of mass closures. Rank Group, the owner of Grosvenor Casinos, has said it could shut up to 16 of its 47 venues, at a cost of 1,800 jobs.

"Economically incoherent" — Rank Group, in a statement to the Telegraph, describing a doubling of machine games duty that it says would cost the company an extra £35m against post-tax profits of £28.9m last year.

Betting shop operators have raised similar alarms. In a letter to Prime Minister Andy Burnham last month, Entain chief executive Stella David warned that a 40% duty rate could trigger widespread betting shop closures, putting up to 1,470 shops and 15,900 jobs at risk and costing the Exchequer around £120m.

Genting Already Confirmed Its First Closure

Genting named its first concrete casualty of the pressure last week when it confirmed the closure of its Coventry casino, which opened in 2012 and employed 51 staff, after the venue was judged no longer commercially viable.

Willcock said Genting and Rank have each identified the venues they would close but have not disclosed the locations, adding that the sites were concentrated in less affluent towns and cities in the North and Midlands. Genting's current portfolio includes casinos in Blackpool, Bolton, Stoke-on-Trent and Salford.

Together, the 29 venues the two operators say are at risk represent almost a third of the 108 land-based casinos still trading in the UK. Both companies say they have already briefed officials at the Treasury and the Department for Culture, Media and Sport on their plans, ahead of the Budget on 28 October.

Physical casinos carry high fixed costs because of their large premises and the staffing needed for croupiers, chefs, bar staff, cleaners and security, which operators say leaves them more exposed to a sharp tax rise than online gambling businesses with lower overheads.