BGC slams Chancellor for "bizarre" Covid-19 relief exclusion

20 March 2020

British industry body The Betting and Gaming Council has written to the Chancellor of the Exchequer after the gambling industry was excluded from all forms of business rate relief intended to ease the impact of the novel coronavirus (Covid-19) pandemic.

On 18 March, Sunak announced a series of measures to help businesses who may be disproportionately affected by the pandemic, including making all retail, leisure and hospitality businesses exempt from paying business rates for 12 months.

The Business Rates Local Authority Guidance, which instructs authorities on who is eligible for relief from business rates, specifically excludes ‘casinos and gambling clubs’ and classifies retail betting shops as financial services rather than leisure, meaning they are also ineligible.

“Any suggestion that casinos are not part of the leisure industry is frankly bizarre when they provide entertainment, food and drink to millions of people every year,” the BGC said. "The government has quite rightly added many other businesses to the official guidance such as nightclubs, but for reasons no one can work out betting shops, casinos and bingo halls have been deliberately left out to dry.

“Why are the many hardworking staff that are employed in our industry, whose jobs are at risk because of the same challenges faced in other leisure companies, not considered by the Treasury worthy of similar support?”

The BGC said that all parts of the business are currently making losses, with up to 140 casinos and almost 7,000 high street bookmakers set to close “imminently" due to social distancing measures and the lack of major sport occuring.

“If there is no change in the government‘s approach, within months many casinos will be insolvent and we run the very risk that permanent closures of betting shops will occur,” the BGC said.

In addition to business rate relief, the BGC said there were a variety of other measures the Chancellor could take in order to ease the pressure on the industry. These measures include support such as the government paying a significant portion of payroll costs, access to Business Interruption loans or guarantees and more time to pay on all taxes and gaming duties.

“We recognise these are unprecedented times and we appreciate the pressures that you and your colleagues in government are under in order to tackle the crisis,” the BGC said. “In responding to the crisis, our members have offered to free up staff time to help, for example where they have medical training, and the use of our premises for catering or any other purpose as required to help those in most need.”

The BGC added that any measures that could lead to casinos or betting shops closing would boost unlicensed operators.

“Without the kind of help that the Government is rightly prepared to offer other sectors, including in other parts of the hospitality, leisure and entertainment industries, there is a real danger that the physical presence of our industry on the high street, in our towns and cities, will be largely wiped out,” the BGC said.

“Not only is this a sector which provides a leisure activity enjoyed by millions of people up and down the country, but its closure could lead to a migration of gambling to the black market, which is not only unregulated and an unsafe place for people to bet, but it also contributes nothing to the Exchequer or the country.”

Earlier this month, the BGC wrote to the Chancellor ahead of his first budget, calling for the small business rate relief - which currently allows businesses based in property worth less than £51,000 to pay less tax on the occupation of non-domestic property - to apply to more businesses.

The virus has had a major effect on the finances of many of the UK's largest gambling businesses as share prices plummet across the industry while H2 Gambling Capital today said it now expects global gambling revenues to fall by 11%.

Flutter Entertainment, the parent company of Paddy Power Betfair, warned that the cancellation of sports events could lead to a £110m (€121.3m/$136.0m) decline in (EBITDA) as approximately 78% of its total revenue in 2019 was generated by betting on sports.

Flutter’s future merger partner The Stars Group, however, said that while these cancellations will have a major impact on its sports betting revenue, it remained confident of growth as much of its revenue comes from poker and casino. The operator added that so far it has performed ahead of expectations so far in the current quarter.

Ladbrokes Coral operator GVC Holdings revealed that its own EBITDA could decline by £150m because of the lack of sports betting opportunities, before adding a further loss of up to £25m when it was announced that all British horseracing until the end of April would be suspended.

William Hill, meanwhile, suspended its 2019 dividend as it expects significant disruption from the suspension of professional sports - with 53% of 2019 revenue coming from sports betting - and the closure of US casinos.