Fred Done warns of bloodbath for UK betting shops and horse racing

The British gambling industry is facing a severe test that, according to industry veteran Fred Done, threatens the very existence of traditional high street betting shops. The founder of bookmaking giant Betfred has used stark language to describe the current situation following the last Autumn Budget and the further burdens now looming. Together with his brother Peter, Fred Done is among the nation's largest taxpayers, having transferred 400 million British Pounds to the Exchequer last year. However, a limit appears to have been reached where investment and sponsorship deals must give way to the harsh reality of the numbers.

The 81-year-old billionaire is particularly stung by the social classification of his business. The fact that government officials often group betting shops with illicit tobacco traders or rogue vape shops hits the son of a Salford bookmaker hard. For him, his shops are social hubs in working-class neighborhoods where people gather for an average stake of 10.87 Pounds. This sense of community is now at risk as profitability is being massively undermined by rising levies.

Numbers and facts

The economic impact is already measurable. Tax increases that came into effect in April nearly doubled the online gaming duty from 21 to 40 percent. The digital sports betting levy also rose from 15 to 25 percent. The consequences for retail outlets are devastating. Betfred has already closed 132 branches in the past year. Competitors like Entain shuttered 70 locations of their Ladbrokes and Coral brands, while Flutter closed 57 shops at Paddy Power. The group evoke was hit particularly hard, closing around 250 shops after selling William Hill to Greek-based Intralot for 243 million Pounds.

"I’m not asking anyone to feel sorry for bookmakers. But I am asking the government to open their eyes. You can’t squeeze any more out of this industry. Every penny more of tax will kill investment, kill jobs, [and] kill horse-racing." - Fred Done, Co-founder of Betfred

A central point of contention is the Machine Gambling Duty (MGD) on gaming machines in branches. Since betting shops generate about 50 percent of their income from these machines, doubling the tax to 40 percent, as proposed by some think tanks, would be the death knell for many locations. Without this income, Done argues that the economic operation of the shops is simply impossible.

Background

Sports sponsorship is the first visible victim of the crisis. Done has already confirmed that Betfred will not renew its partnership with the Rugby League. The consequences for horse racing could be even more severe. Betfred is the main sponsor of prestigious races such as the Derby, the Oaks, and the St Leger. Should the budget on October 28 include further burdens, the company will have to walk away from these "British Classics." This would break a decades-long symbiosis between the sport and bookmakers, massively endangering the funding of British racing.

Done also warns of a customer exodus. If legal providers are crushed by taxes, it drives customers directly into the arms of unlicensed black market operators. While he personally wishes to continue working and paying taxes in his ninth decade, he says the industry needs "room to breathe" to survive.

Why it matters for German players

The situation in the UK clearly demonstrates the consequences of an excessive tax burden on a regulated market. German players are already familiar with this issue through the State Treaty on Gambling 2021 (GlüStV). In Germany, a tax of 5.3 percent is levied on every stake in online slots and poker, which suppresses return-to-player (RTP) rates. Many legal providers must adjust their offerings to remain profitable. Unlike in the UK, where taxes over 40 percent are being discussed, Germany already has very restrictive rules.

For players here, the stability of the legal market primarily means security. Those playing with a provider on the GGL whitelist are protected from over-indebtedness through the central LUGAS system, such as the monthly deposit limit of 1,000 Euro. The stake limit of 1 Euro per spin also serves player protection. However, the British warnings highlight that excessive fiscal pressure can make legal offers unattractive, causing customers to shift to dangerous illegal providers lacking player protection.

What it means for GGL-licensed casinos

For casinos with a license from the Joint Gambling Authority of the States (GGL), the British development serves as a warning. When sponsorship deals break away on a large scale, the visibility of legal brands declines. German providers already struggle with strict advertising bans and high taxes. A weakening of legal market leaders, as Fred Done predicts for the UK, would jeopardize the channeling mandate of the GlüStV in Germany. Only financially healthy, legal companies can permanently finance high standards for player protection and IT security.