Draft SMF report on Machine Games Duty published with internal comments intact

A draft of the Social Market Foundation’s report on Machine Games Duty was published with internal staff comments intact by Guido Fawkes on Tuesday, the Westminster gossip and political news website founded by blogger Paul Staines.

The report, Addressing the harm, was launched in June and calls for MGD on Category B machines to double from 20% to 40%, raising an estimated £275 million–£458 million a year. Alex Ballinger MP, who led a letter from 90 Labour MPs demanding a 40% rate, also wrote the report’s foreword.

Internal queries on employment and crime

In a margin note, SMF director Theo Bertram asked what grounds the authors had for confidence that those losing their jobs would find work elsewhere. According to the draft, chief economist Gideon Salutin replied that there was no guarantee individual workers would, but that employment nationally would grow.

On crime, Salutin responded that a causal link was “unclear, so I’ve changed it to correlation.”

A British Gambling Commission spokesperson told City AM that the reported internal comments “raise serious questions about the evidence being used to justify further tax increases”.

Industry impact warnings

The BGC has warned a 40% MGD rate could put up to 3,800 casino jobs at risk, while Regulus Partners modelling suggests around 1,500 betting shops could close immediately. The British Horseracing Authority puts the potential cost to racing at £92 million a year.

Greg Knight, CEO of Jenningsbet, stated “The Social Market Foundation has been totally discredited,” accusing the think tank of using tax “as a smokescreen” to see gambling abolished.

Chancellor John Healey delivers his Budget on Wednesday 28 October, and a rise in MGD is widely expected after Remote Gaming Duty rose to 40% in April. Reports suggest Healey may settle on 25% rather than 40%.