The co-founder of Paddy Power has criticized betting companies for enticing inexperienced gamblers into addictive activities to boost their earnings.
Stewart Kenny, who served on the company’s board for 29 years, claimed he left after the company removed initiatives aimed at assisting individuals with gambling problems.
During his testimony to the Commons Treasury committee, he highlighted how bookmakers offer free spins for online casino games shortly after a player opens an account, likening it to a bar giving a complimentary strong drink after a customer finishes a light drink.
Advocating for measures to deter bookmakers from steering individuals toward more addictive forms of gambling, Kenny joined others in urging Chancellor Rachel Reeves to impose higher taxes on gambling firms in the upcoming Budget.
A study commissioned by the Betting and Gaming Council suggested that proposed tax increases could result in the loss of 40,000 jobs and lead to around £8.4 billion being redirected to the illicit market.
Kenny noted the substantial rise in gambling companies’ profits and dismissed industry claims that higher taxes would drive customers to unregulated competitors as fearmongering.
Carsten Jung from the Institute for Public Policy Research proposed increased taxation on gambling companies to offset the societal harm caused. Jung emphasized the high levels of addiction, particularly among young men, impacting their financial stability and social interactions.
Jung recommended a raise in remote gambling duty from 21% to 50%, machine games duty from 20% to 50%, and general betting duty from 15% to 25%, aiming to generate £3.2 billion.
Dr. Theo Bertram, director of the Social Market Foundation, stressed the need to impose higher taxes on online slot machines and casinos while safeguarding traditional horse racing betting. Bertram highlighted the significant increase in remote gaming activity during the COVID-19 pandemic.
Concerns were raised by lawmakers regarding the average betting levy in the industry, estimated at 22%, and its exemption from VAT. Stephen Hodgson, head of the Betting and Gaming Council’s tax committee, clarified that the effective tax rate exceeds 65% when considering all taxes.
Grainne Hurst, CEO of the Betting and Gaming Council, defended the industry against claims of widespread problem gambling, pointing out that millions of punters engage responsibly. She refuted assertions of social harm, stating that only a small fraction, 0.4%, experience gambling-related issues.
Hurst anticipated that higher taxes could lead to less favorable odds for bettors, potentially driving them towards unregulated operators. She emphasized the principle that higher taxation often results in reduced consumption and changes in consumer behavior.
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