SMF's gambling tax report sparks debate

The think tank Social Market Foundation (SMF) has faced criticism after a draft of its report, which proposes raising the Machine Games Duty (MGD) on Category B machines from 20 percent to 40 percent, leaked online. The tax increase is expected to be announced by Chancellor John Healey in the budget on 28 October.

Guido Fawkes, which published the draft, said it was accidentally exposed along with comments on it. The text shows SMF director Theo Bertram asking what the basis was for the claim that people who lose their jobs will find work elsewhere. Chief economist Gideon Salutin responded that there is no guarantee for individual workers, but that he believes employment will rise at the national level.

A similar debate exists on crime. Bertram warned against establishing a causal link between gambling and crime, while Salutin acknowledged the connection is uncertain and said he had changed the wording to correlation. The tax will hit bingo halls and seaside amusement arcades, but fears of a shift to the black market were dismissed.

Reaction from the industry was swift. Jenningsbet CEO Greg Knight argued that the SMF has been completely discredited and is using the tax as a cover for banning gambling. Meanwhile, the published report already accepts that closures in the sector could lead to job losses, and the draft reportedly softens a causal claim. Alex Ballinger MP, who wrote the foreword to the report, had also launched a letter from 90 Labour MPs demanding a 40 percent rate.