Genting UK Warns: Higher Taxes Threaten 38 Percent of Casinos

The gambling industry in the UK is facing a severe test that could have far-reaching consequences for the land-based market. Genting UK, a major player in the international gambling world, is now sounding the alarm. The reason is the UK Treasury's plan to drastically increase taxes on gaming machines. This measure could lead to a significant portion of traditional venues closing their doors forever. CEO Paul Willcock is blunt about the precarious situation, warning of a domino effect that could affect not only his own staff but the entire local economy in the affected regions.

The mood in the British sector is already tense, as the industry continues to struggle with the aftermath of the pandemic, high energy costs, and general consumer spending restraint. The proposed doubling of the Machine Gaming Duty (MGD) acts as an accelerant for the already difficult financial situation of many venues. When the tax burden increases to this extent without a proportional rise in revenue, even established brands like Genting begin to falter. The focus is primarily on regional locations that benefit less from international tourism than the large London houses.

Numbers and facts

The concrete effects of the proposed tax increase can be expressed in hard numbers. Of the 32 casinos Genting operates in the UK, 13 would become unprofitable or economically unsustainable according to internal modeling. This represents a rate of approximately 38 percent of all branches. Consequently, 850 jobs within the company are directly at risk. The proposed increase aims to raise the tax rate for gaming machines in land-based casinos from the current 20 percent to 40 percent. This follows a trend, as the tax for online gaming was already increased to 40 percent this April.

Financially, Genting UK looks back on a turbulent year. While revenue increased from £323.1 million to £353.1 million, pre-tax losses widened dramatically from £2.7 million to £24.5 million. A major reason for this was exceptional charges totaling £35 million. These included impairments from a strategic realignment of a resort and costs related to the closure of Crockfords Club in October 2023, Britain’s oldest casino with 195 years of operation.

Background

In an op-ed for CityAM, Paul Willcock criticized the government, stating it risks achieving the opposite of its intention. According to Willcock, higher tax rates do not necessarily lead to higher state revenues if they discourage investment and force businesses to close. He emphasizes the connection between casinos and local infrastructure.

"When a visitor spends an evening at a casino, the value generated rarely begins or ends at the venue’s doors. The same visit can support a nearby hotel, a pre-theatre meal, a taxi journey, a bar or a late-night food business." - Paul Willcock, CEO of Genting Casinos UK

The trade organization Bacta supports these assessments. In a survey, 90 percent of members stated that the impact of such a tax increase would be severe. It is not just about a single company but a structural threat to the entire leisure sector, which continues to suffer from the effects of inflation.

Why it matters for German players

For German players who enjoy active play in online casinos with a GGL license (Gemeinsame Glücksspielbehörde der Länder), the crisis in the UK seems far away. However, the mechanisms of regulation and taxation are transferable. The German State Treaty on Gambling 2021 (GlüStV 2021) has already set strict limits to ensure player protection and control the market. This includes the monthly deposit limit of 1,000 euros across all providers, monitored by the LUGAS system, and the 1 euro per spin stake limit on virtual slot machines.

If states tighten the tax screw too much, there is a risk in Germany that legal providers will become unprofitable. This could tempt players to move to the unregulated black market (e.g., Curacao or MGA casinos without a German license), where player protection measures are often absent. German players should therefore always ensure they only play with providers on the official whitelist, as only there is compliance with strict German safety standards guaranteed. An unstable industry abroad reminds us how important a balanced regulation between player protection and economic viability is.

What it means for GGL-licensed casinos

German casinos with a GGL license must closely monitor international developments. Higher taxes in neighboring countries or key markets like the UK can influence capital flows. When large corporations like Genting face massive pressure, the willingness to invest in new technologies or improved player protection tools decreases. For the German market, this means the GGL must continue to find a balance to maintain the attractiveness of the legal offering. Only an economically healthy legal market can permanently fulfill the strict requirements of the GlüStV 2021 without the quality of the offering suffering.