SIMON THOMAS
Creating a healthy and sustainable gambling industry
We continue our insightful series as Hippodrome Casino’s Executive Chairman, Simon Thomas, answers the industry’s questions.
Q
uestion: With the Government looking again at gambling on the high street and further tax increases being discussed, what should policymakers be doing to create a healthy and sustainable gambling industry? Simon says: There is a danger in public policy that when something isn’t producing the outcome you want, the temptation is to reach for the biggest lever available. In gambling, that increasingly seems to be tax. If you don’t like the amount of gambling taking place, tax it more heavily. If you don’t like particular products, tax them more heavily. If you want fewer gambling businesses, make them less economically viable.
It may produce an outcome. But it isn’t much of a strategy.
I should probably declare an interest at this point. I run a casino, so nobody reading this will be astonished to discover that I don’t spend my evenings dreaming up imaginative new taxes for the Chancellor. But there is a serious point here which goes well beyond the industry’s understandable desire to keep its tax bill down. Taxation and regulation have different jobs. The role of tax is to finance public spending. Regulation should determine the shape of the market we want. We get into trouble when we start asking tax to do the regulator’s job. The current debate about gambling premises on Britain’s high streets illustrates the problem rather well. There are legitimate concerns about harms from gambling, including suggestions that some operators have disregarded either the spirit or the letter of the law. It is important that the Government takes time to understand those concerns and respond proportionately. But before changing the law, surely the first question should be: what precisely is the problem we are trying to solve? If the concern is about a particular type of gambling, or premises ostensibly licensed for one activity effectively operating as something else, then the regulatory response should deal specifically with that activity.
14 SEPTEMBER 2026
The Gambling Commission has broad powers under existing regulation and the ability to create new licence conditions to prevent the letter or spirit of our gambling laws from being manipulated or abused.
There is a question of whether those powers have been applied effectively enough. If legislation needs sharpening, regulations changing or enforcement strengthening, do it. And if Parliament concludes that the balance between particular types of premises needs adjusting because the market has evolved since 2005, then let’s have that debate. But regulate the thing you actually want to regulate. The risk is that broad changes designed to address a specific problem end up catching completely different businesses in the process – resulting in unintended negative consequences. Gambling is particularly vulnerable to that because we continue to talk about “the gambling industry” as though it were one homogeneous sector.
It isn’t. A traditional bingo hall is not the same proposition as an adult gaming centre. A working men’s club isn’t a casino. A casino isn’t a betting shop, and a betting shop isn’t an online gaming business. They have different customers, products, employment models, economics and regulatory questions. You wouldn’t regulate a nightclub, restaurant and supermarket identically simply because all three sell alcohol.
Government has already demonstrated that it understands the importance of differentiation. Its recent approach to gambling taxation has distinguished between remote gaming and land-based bingo, including the decision to abolish Bingo Duty. Whatever one thinks about the individual tax decisions, the underlying principle is important: different parts of the industry have different characteristics and should not automatically receive identical treatment. Which brings us to Machine Games Duty, or MGD.
If the Government wants to increase MGD because it believes that is an appropriate
sustainable means of raising additional revenue, then there is an argument to be had about the rate, the economic evidence and what different parts of the land-based sector can sustainably bear.
But there is a tempting comparison which needs to be challenged. Remote gaming is taxed at 40 per cent, so why should a gaming machine in a land-based casino be taxed differently?
Because while the products may sometimes look similar on a screen, the businesses behind them are not.
A land-based casino is a physical, people- intensive business. Behind that machine are premises, employees, security, surveillance, compliance, hospitality and substantial capital investment. Increasingly there are also restaurants, bars, live entertainment and events. An online operator has fundamentally different economics and can serve very large numbers of customers through a technology platform. Similar products do not automatically mean economically equivalent businesses, and sensible tax policy should recognise the distinction.
That matters beyond the casino itself. Land-based casinos are part of Britain’s hospitality, visitor and night-time economy. They are substantial employers and highly regulated, staffed and secure late-night venues. In towns, cities and visitor destinations they sit within a wider ecosystem of hotels, theatres, restaurants, bars and cultural attractions, sustaining economic activity at hours when much of the conventional high street has closed. There is also a particularly odd contradiction in considering a significant increase in MGD now. Government has only just modernised the land-based casino regime, creating the opportunity for operators to invest and evolve. Those reforms should allow us to think much more ambitiously about the British casino of the next decade: modern, experience-led destinations bringing together gaming, entertainment, food, drink and social experiences.
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