On March 3rd, Chancellor Rishi Sunak issued an oral statement to Parliament discussing the 2021 budget.
In his address, he mentioned that UK’s economy has seen a fall not witnessed in more than three centuries and that since March of 2020, over 700,000 workers have lost their jobs. As a response to these numbers, the government has approved over £280 billion in support funds to protect from more people losing employment.
The COVID-19 pandemic has decimated industries around the globe, and the gambling sector is one of those that have felt the full brunt force of its wrath. Operators were already affected by the reduction in FOBT stakes, and the government-issued lockdowns only dealt another blow to their bottom lines. William Hill recently announced that their adjusted pre-tax profit for 2020 was only £9.1 million, compared to the £96 million in 2019. Thus, everyone in this sector eagerly anticipated the release of the 2021 budget to see what assistance the country will provide for operators to stay afloat and survive these trying times.
BGC Welcomes Leisure Sector Lifeline
In February, the UK’s Betting and Gaming Council (BGC) insisted that UK casinos and betting shops must reopen once the country exited its lockdown. According to them, the industry employs over 44,000 people. However, that number is now down by more than 5,000 due to 375 gambling businesses closing since the start of 2021. The BGC urged ministers to allow casinos and betting shops to remain open in the same working hours as hospitality businesses and that there must be no more curfews. These practices proved ineffective and must get scrapped altogether, given that the sector is witnessing its darkest hour.
The BGC appealed for government support and even proposed a five-point recovery plan. Once the UK Chancellor announced the 2021 budget, the BGC immediately sent out a press release. In it, they welcomed the £5 billion in support that aims to assist high-street businesses in getting back on track. The plan includes grants of up to £6,000 for retail stores. Plus, financial aid up to £18,000 for venues that got to open at later dates, such as betting shops. Michael Dugher, BGC’s chief executive, said that this decision provides a bit of relief, and without the Chancellor’s help, many more gambling businesses would have failed.
Operators Worry About Tax Increases
Despite the good news stemming from the budget announcement, many operators believe that they are still not out of the woods. In January, news came out that, from March to December of 2020, government borrowing passed the £300 billion mark. Due to the recent lockdowns, many expect that the 2021 figures will mirror those of 2020 or grow larger. The funds spend by Chancellor Sunak in response to the pandemic have left UK’s total debt at £2 trillion. Meaning the budget deficit could be 20% of the GDP. Thus, many operators worry that the Chancellor will look to plug pandemic holes by raising corporate taxes as a temporary measure.Leave a comment