The Betting and Gaming Council (BGC) has accused the British government of a secret tax raid on casinos that it says could cost the industry £5 million (€5.7 million) a year.

The lawsuit relates to the freeze on gaming tax rates set out in Finance Secretary Jeremy Hunt’s autumn statement. In a statement, the BGC said those in the land-based casino sector had hoped the bands would rise with inflation after they were frozen in March.

The BGC said the freeze on gambling tax rates will effectively result in a £25 million tax rise for casinos over the next five years. The BGC urged Hunt to rethink, saying a freeze on tariff margins would help a sector struggling with rising wages and high inflation.

BGC chief executive Michael Dugher argued that the “hidden tax” had the potential to slow the recovery and weaken future growth.

“Abolition would have given the land-based casino sector a welcome boost at a crucial time,” he said. “Instead, the decision to maintain the status quo represents a missed opportunity for companies willing and able to create jobs and investment across the country.”

Casinos are waiting for positive effects of the gambling reform

The BGC found that casinos pay £300 million in taxes annually. Across the economy, the sector generates an estimated gross value of £800 million per year.

However, casinos have been hit hard by challenges such as the cost of living crisis. The BGO estimates that four casinos have closed in recent months, while the sector employs 25% fewer workers than four years ago. One in four casinos has closed since 2005, and only 117 remain nationwide.

The BGC has broadly secured the Government’s White Paper on Gambling, particularly in the context of casino reform. The white paper includes proposals on affordability checks, sports betting and slot numbers.

“Right now, casinos, which play such an important role in the tourism and hospitality sectors, are awaiting the modest but mission-critical policy changes announced in the White Paper,” Dugher added.

“It seems short-sighted to maintain this stealth tax while not making changes that will allow casinos to hire new employees and grow. The BGC is calling for a rethink so that gaming tax rates can be adjusted in line with inflation at the next opportunity.”

The government could standardize the remote gambling tax

In further news from the Autumn Statement, the Chancellor said the Government would soon discuss bringing remote gambling under one tax, as opposed to the current three-tax structure.

Chancellor Hunt’s plan is for the government to consult “shortly” on proposals to change the structure of taxation on remote gambling.

It defines remote gambling as “gambling offered via the Internet, telephone, television and radio.”

The consultation will discuss the abolition of the three-tax structure, consisting of remote gaming tax, general betting tax and pool betting tax.