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It's very noticeable in Healy's speech today. He didn't mention betting shops at all. From what I saw at least, anyway, the term betting shop did not come up. He kept saying adult gaming centers. Obviously, the machine games duty is going to impact retail betting shops, Betfred, Ladbrokes, Coral, Paddy Pound, so on because they have these gaming machines in. But I think the government, it appears from this speech that the segment that the government are taking most issue with is the adult gaming centers. And think we've got, I've got, you know, I've got to be honest, are we really surprised at that? Deputy Speaker to pay for this support for our high streets. That was UK Chancellor John Healy confirming a 25 % increase in machines game duty to 25%. to help pay for support for the UK's high streets. Adult gaming centres are also exempt from relief to business rates that other leisure and hospitality venues will be entitled to. There's a relief that it wasn't the 40 % doomsday scenario, but there remains big questions to answer for operators who are already facing huge pressures in a tax-pressured environment. Welcome back to iGaming Daily, supported by Optimove, the creator of positionalist marketing and the number one player engagement solution for sports betting and iGaming operators. I'm Charlie Horner and to discuss the budget with me today, I'm joined by SBC's editor-at-large, Ted Menier, and SBC News editor, Ted Orme Clay. Ted M, how are you? It's a big day. I'm very well. Keep you on my energy, despite not having lunch, but we'll see to this after the podcast. Very good. And Ted OC, I'm very disappointed in all of us that we didn't follow tradition and have a little glass of whiskey whilst doing this. How are you? Yeah, I'm pretty good. Thank you, Charlie. Maybe it's little early in the day for us to break out the whiskies. yeah, like you said earlier, big day today. It's not quite as big as last year's budget, I don't think, but obviously still. So a lot of bigger consequences for the industry and some big plans that the government has for the high street and for the country for us to get into. Absolutely. Well, look, Machines Game Duty is up to 25 % from 20%. That's maybe a surprise in some sense that it's not the 40 % that we did anticipate a few weeks ago. First of all then, Ted M, what was your initial reaction to what John Healy announced today? My view is that it's a good outcome. And that is considering the hysteria leading up to this Alton statement. First of all, thank God there was no budget leak this year. Chancellor Healy kept his cards closed, especially organic affairs and the final outcome. I know that there will be those that are disappointed that it's still a tax hike and that arcades are excluded from retail relief. fine, I get it. But to me, this is a measured budget by Helian Labor. And remember that there's been a really kind of drastic reduction in headroom. And you can pinpoint that to kind of the mishandling, let's say, of affairs in the Middle East by a certain government. I also think that overall, the narrative between the relationship of gambling and the government it ends in a positive note. Gambling is paying for PM Burnham's high street renaissance and it can say it's part now of a bigger picture for the UK economy. And I think that in some ways I kind of view this as, you know, a settlement of terms with the sector and it's something that we needed to learn or we needed to get to. My view is positive all round. Yeah, I think it's probably going to be a bit of a bittersweet moment for something that obviously, as Ted said, some people in the a lot of people in industry are going to react negatively to this. already seen the betting and gaming council put a statement out about it. But yeah, I think it is bittersweet because like I said on the previous podcast, it could be far worse for one thing. They've not gone for the doubling of rates that was being called for by the Social Market Foundation think tank and I think Gordon Brown was quite vocally supportive of that as well. My overall assessment of the budget, know, just as a British citizen, just outside of, you know, our remit as journalists in this industry, as trade journalists, I do think it's very refreshing to see a government bring out a budget. The first budget I think we've seen in a long while that's really targeting a rejuvenation of high streets and like the commerce within the centre of communities. That's something that's been neglected a great deal over the years and has been punished pretty heavily by going back to the 2000s, the recession, subsequent austerity, tightening of people's belts, Covid, more recessions and so on. And I think something that we do often need to remember again, We find we cover this industry, work within this industry, we know lots of people within it. But for governments like this, are far, there's a bigger picture out there beyond this and sure well, there may be some negative consequences for industry as a result of this decision. The government has got to consider the wider UK economy. They've got their priorities with, like I said, the high street and the communities. And as Ted mentioned, we've got... conflicts overseas that are having a huge impact economically here and the government's top priority at the moment it seems to be is elevating that impact on the working person, the working family through energy bills, through increasing the national living wage and the national minimum wage and by doing what they think will breathe new life into local economies and I think maybe It sounds harsh, but if there has to be an increase in it, some taxes from the gaming sector for it to play its part in that, then I think a lot of stakeholders should just accept it and yeah, and accept that things could have been much more severe. Well, yeah, I think certainly a lot calmer than... we anticipated, right? We thought it was going to be 40%, it was 25 % and the markets reflect that at the time of recording. Ranks share prices up around 7.5%, Evolks up around 4 % and Taines up around 5%. So the markets are somewhat calm compared to maybe the worst case scenario. But Ted, OC that is, you wrote a big piece earlier in the week on SBC News about the lead up to the budget. And I think one of the big sort of messages of campaigning from the industry is the appeal on employment, right? What has the sector been listened to essentially through the conversations that you've had and the reaction that you've had on SBC News in the days leading up to the budget and now what we've seen subsequently? Obviously, I know that my response to your first question may have come across as a bit harsh given what we're going to talk about now. I think like lots of things to do with politics and economics and business, there are nuances to everything. I may have said that the gambling sector is, someone needs to accept that there is a bigger picture for governments to into account, but we do also need to address the fact that this increase, this tax increase will have some consequences within it. And there are a lot of widespread concerns about the impact it could have on employment. and hiring within a sector that's already seeing some pretty significant structural changes as a result of the April tax increases and just generally because of a shift among consumers from retail to online that's been going on for a long, time. also something a lot of people might not want to, lot of people, decision makers in the industry might not want to talk about is the fact that AI is making it easier to do the same job of less people in some cases but that's a different topic for a different day. But yeah, there will undoubtedly be concerns about employment from this. know, operator budgets are going to have to change and we are probably going to see some shops close as a result of that and sadly some people will lose their jobs. Again though, there is part of an element of this where Is that something that was going to come further down the line anyway as more and more operators just look at shops and think even without a high machine games duty tax, we're not really getting a return on investment on this thing because more and more people are moving online. Like I said, there's lot of everything, like everything in this sort of topic and these areas, there's just a lot of nuances at play. I think overall, reflective of what's been said by the industry. And I think it was right to go with an appeal on employment as Ted Ose said. And then, you know, looking back at kind of today's autumn statement is one thing the Chancellor's really underlining is, okay, up against all these economic headwinds, these global factors, the UK is actually not doing that bad. It's got a very positive note from the IMF saying that its debt handling is better. than any G7 nation. Also, no, it's, it's, and you know, having, having worked, um, I know that, you know, 0.5 or 0.8 % growth isn't great, but it's still growth compared to what other kind of European nations are going through. I think that were going through 10 years ago. Yes. And, you know, we're We're not even these kind of pizza troughs with high growth nations. think that Healey's trying to really report that this is a stable budget for a stable economy that has to navigate these upcoming global headwinds in 2027. I certainly think as an overall picture, it is a bit of a steady as she goes budget in terms of just keeping things ticking along. I guess the high street is a big part of that. But, you know, retail betting shops are in decline, I think, maybe against the mainstream press and their reporting of it. They seem to try and portray that this is an industry that is multiplying. It's not. Retail shops are in decline. Do we really think that gambling is going to pay for Andy Burnham's High Street Revival? Ted M, what do you think? Here my answer is yes. And that's what the treasury said. And I hope that everyone can stick to this plan. OK, I'm fine with they were putting us with vape shots on the naughty step of Andy Burden's plans. But I think that if in somehow if we're attached to a greater picture, it's better for the it's a better narrative for UK gambling to at least be involved in these discussions, to at least have it. you know, not to be an afterthought for the government. It's so could have easily gone the other way. And I think that again, going back to what I said, this is a settlement and this is how we should take this news. It's, know, not everything can be binary. Like if it's a right or wrong outcome from the industry. Compromise, isn't it? Yeah. Sometimes with issues like this, sometimes it just has to be a compromise. So do you think that, I guess this ultimate compromise then, do we think that this is a consequence of sector judgment from government? we think that, yeah, like Ted said, we've been put on the naughty step or I guess maybe what you're both hinting at is this is just an economic reality that we're dealing with a more turbulent world in an economy where we're trying to reduce debt and our debt interest payments. Is there just a lack of headroom and that compromise needs to be made? Ted O.C., what do you think? Yeah, I think so basically, know, the government have probably just done the maths on this and thought this is what we can I reckon they probably have listened to the industry's concerns. We know that industry representatives were meeting with them with people from the Treasury and so on with the know DC obviously DC messes like the regulatory Overseer I guess political overseas of gambling. doesn't have any real impact on the budget But still, you know, we know people have been meeting with the government that have mapped out their concerns the government I think will have taken a look at this and gone, if we double all these machine games duty rates that will completely flatten betting shops that will result in these companies then paying us less tax, will result in people potentially having to claim benefits, claim universal credit or something while they're looking for another job. That results in costs going up, it results in those individual people's, you know, personal spend reducing, so that's money that's not going around the economy. They'll have taken a lot of this into consideration. But ultimately, yes, I do think they have put specifically one element of the gambling industry on the naughty step when it comes to their policy around, like I said, reinvigorating communities in local high streets and so on. And that is the adult gaming center in particular. You know, it's very noticeable in Healy's speech today. He didn't mention betting shops at all. From what I saw at least, anyway, the term betting shop did not come up. He kept saying adult gaming centers. Obviously the machine games duty is going to impact retail betting, like betting shops, betfred, ladbrokes, coral, paddypounds, so on because they have these gaming machines in. But I think the government, it appears from this speech that the segment that the government are taking most issue with is the adult gaming centers. And I think we've got, I've got, you know, I've got to be honest, are we really surprised at that? People don't like them, do they? At the end of the day, people don't like having loads of what get called 24 hour slot shops on their high streets. It's not a particularly popular product. People associate it with harm and addiction and just people easily losing their money. The betting shop has that argument to it of we are an element of the community. People come in, have a chat, have a coffee, put their bet on the racers and the football for the day and then go about their day. The adult gaming center doesn't have that argument. And that does seem to be the element of the industry. I think it's been put more on the naughty step. That obviously doesn't mean that betting shops have got away scot-free. The gaming machines are a big part of their revenue and they will feel the consequences that maybe the industry should take a look back and think, wait, should we have made this such a core part of the, you know, such a controversial product, such a core part of the retail area. Maybe there should be bit of self-reflection there as well, to be honest. Healy, leave those vape shops alone. Well, that's it, Gambling, vape shops, banks, landlords, all on the John Healy naughty step. Okay, well, let's take a very short break, Ted and Ted, and we'll come back and we'll continue the discussion. Welcome back to iGaming Daily. The BGC has responded to John Healy's budget warning that... There could be almost 9,000 job losses and almost 1,000 betting shops and casino closures. I think it's, you know, to what extent that is true or not remains to be seen, but I think what is certain is that there will be a review of estates and there will be cost controls. But Ted M, do you think that this... This sort of five percentage point, only 25 % increase on MGD softens the blow on that review of the estates. It does. It does. And I think now it's, we just got to turn to kind of industry leadership and see their reaction. Also what's in store for these executive teams that have, you know, to put it simply, they booked in the worst case scenario. or especially on machine gaming duties being doubled. So what's the impact here in the state and they cost cutting plans. This still is an industry in adjustment, especially coming in from the remote gaming duties increased to 40%. That is ongoing. And I think this kind of, it kind of. I think that we're kind of looking at kind of a softer landing now. Maybe they can, you know, take their foot off or kind of slow kind of the pedals down on this kind of acceleration of cost controls. And yeah, I mean, to me, it should be kind of welcome news for everyone. Yeah, you're absolutely right that it's an industry in adjustment. And we saw the news coming out of... Lutter last week of course and their adjustments to the 40 % remote gaming duty. Ted OC, where are you looking next and I guess who do you feel are most exposed by today's tax judgment on machines game duty? I mean I guess well the people who are most exposed would probably be the like we mentioned earlier the adult gaming centers given that their product is entirely the gaming machines so all of everything they everything they make is going to be taxed at higher rate. Betting shops obviously still, like we said, still make a reasonable amount of money from the gaming machines. Some out there probably make more than 50 % of their money from gaming machines. But they have that product mix that will give them a little bit more, I think a little bit more breathing room. Some betting shops anyway. So yeah, I think the fir- The first sector that's going to be impacted is the AGC's. I think that's where we'll start seeing some changes initially. The second area will be how a lot of the major retail betting shop operators in the UK chiefly evoke, entain, bet thread, and then to an extent flutter, because obviously we still have Padi Power, but that doesn't have as big of high street presence as those three I've mentioned. You know, how they change things around this, whether they start accelerating with shop closures, just because of overall budgeting and needing to factor in all these various international conditions due to the nature of their businesses. Like, are we going to have to close something here to make sure that this business in Italy is, you know, we've still got money to account into that or something, you know. That would be the next stage. And I do think something else I'm quite interested in following is really just how the Burnham government's attitude and approach towards the industry changes because it's still not entirely clear. You know I mentioned earlier that John Healy had never used the term betting sharp in his speech today focused on adult gaming centers. But in a previous speech about business rates Burnham I believe did say was it was betting shops, vape shops and dodgy businesses, wasn't it? With a three, he referred to that was a bit more broad. So we are still waiting for a bit more clarity from Burns government about what they actually think of the industry and it's like rolling the British economy and in British society. Sure. Ted M, where are you looking for that sort of... most exposed by this move. think the judgment really changes things now. Look, I'm not saying that this is going to lead to retail revival for UK Ganley, but it prides itself on for likes of Betfred, Woolley Pill. And that's especially kind of on their overall retail strategy, but also kind of Indian bound investment. And the other one that I was actually looking at was Buzz Bingo, I thought was very, very exposed to the tax doubling. So I think This now leads to water rebalancing. But let's remember, and I think that this has been lost, the retail gambling is still a two billion economy and there is still kind of much to gain in there and there's still a competitive edge to that. It's just, I think, a case of are people willing to invest and do they have a long-term approach to actually financing a strategy to, know, jay back kind of these states. game back profile because I think in terms of, you when you, when you put it against online gambling, it's, it's just now just completely a different science to, to, um, operating a retail business. Yeah. Well, maybe, um, you know, when Fred Doane was on the front page of the times and the FT, um, a few, a few weeks ago warning that he would close his entire retail estate. Maybe those sentiments have calmed down just a little now that we've reached what we are calling a bit of a compromise. Let's head towards a close now, gents. We've spoken about this a little bit and questioned this over the summer, whether the judgment on machines game duty and adult gaming centers would sort of close this chapter of generational change for UK gambling licenses. Do we now think that that's still the case or do you think campaigners might push further? Ultimately, where is the next sector's next drama? Are we looking for a reopening of the gambling act review? What's next? Ted O'See, what do you think? Some people are, yeah. think some people always will be. This industry is a high-risk industry at the end of the day and it can often be a controversial one. So it is one that's always going to have detractors and political critics. You know the campaign I just think campaigns always going to be going on in some in some area or another I Wouldn't be I won't be surprised there's still a continuation of the conversation on retail game with a big focus on AGC's And more of a push to roll them back even further. I know about the changes to aim to permit We've now got the budget today I expect we'll probably see some people wanting to keep the ball rolling around them. think another big area is going to continue to be marketing. We're still seeing murmurs around sponsorship in the Premier League, for example, and for English sports. We saw there was that study from the University of Bristol recently, which they do every year. looking at what they call gambling messaging in the Premier League and there was a bit of a flurry of discourse around that topic in the aftermath of that. I think that will continue to always just be another big talking point. There are some people out there, politicians and campaigners who just want to get rid of all betting and gambling, marketing and advertising in sports as we've seen in the Netherlands. I think that will continue to be a talking point that raises his head every now and then. I think there's a lot to take out from today's judgement and number one is that, look, it's a compromise. It's something that we can learn off and I think that even the build-up, the industry presented a better picture of itself than it did last year. But look, if it's drama you want, you're in the right sector and to our audiences I'd say don't worry because gambling can fall out and make enemies very easily. And that's a guarantee. So I'm sure we'll be here this time next year. Sorry, go ahead Ted. I Ted's raised a good point there though about how the, I think the industry's campaigning ahead of this was a lot, had a bit more about it because, you know, we've seen for years now the topic of the black market always be raised. And it's not like that's an illegitimate argument, but it is clear that a lot of politicians at EVE are just numb to it. Or don't believe it or maybe you just don't particularly care depending on the person. And I think the industry seems to have got a bit wise to that that that argument was falling flat despite some of the evidence behind it and they've instead thought, we need to change tact and go for more. Here's the role that betting shops and so on and betting plays in the UK economy. Here's the role that plays supporting UK sport. Here's the role that can play in communities. Here's its big role as an employer and so on. and it's, and it's, and it's rolling in different supply chains. I think that was a lot more intelligent than, uh, than some previous years of like mixing that campaigning and messaging up. Yeah, certainly. think people driven communications is a powerful way to, campaign, particularly in this, uh, increasingly digital and technology driven world. Um, but I'm sure we'll be here this time next year, Ted and Ted talking about the next big. tax judgement on UK gambling or the next big campaign. don't worry, I'm sure this isn't the last of it that we're going to talk about on the podcast. for now, thanks ever so much for joining me, thanks to Optimu for supporting the show, and to our audience, thanks for tuning in to today's episode of iGaming Daily. Come back tomorrow to keep up to date with all the latest global gambling news. you