Clearly whipped up by its band of ideological numpties, the Social Market Foundation believes that a report with lots of percentage symbols and red meat messaging to its base will do the trick. It didn’t account for a forensic analysis within hours from Regulus Partners. And it was devastating. The gambling experts ripped the SMF model apart, effectively warning that ideology and dodgy data does not a credible tax policy make. Here, Coinslot picks out some of the highlights of the Regulus response.
How did SMF rate the gambling harm impact of other products such as National Lottery scratchcards?
RP: By attributing to machines 100 percent of the costs associated with these ‘problem gamblers’, the SMF appears to have assumed that none of the costs should be attributed to participation in any other form of gambling (and that simply reducing or eliminating machine play would result in a meaningful reduction of these costs).
• We’ve been here before haven’t we?
RP: This track record [of the Social Market Foundation] suggests two things. First, that the SMF’s tax policies are the result of political opportunism (and possibly spite) rather than clear analysis; and second, that it is unlikely that any amount of tax reforms will ever satisfy the think tank.
• Is this a tax rise without benefits?
RP: The [SMF] report claims that the tax increase will raise between £275m and £458m in additional tax revenue, while also reducing the consumption of ‘more harmful’ gambling products and boosting the wider economy.
Unfortunately for a UK government looking for easy wins, none of these claims is true.
A 40 percent MGD might just about generate as much money as the 20 percent rate does now (more likely c. 2 percent less), and at the cost of over 40,000 direct high street jobs, c. £100m to British horseracing, and c. half of the displaced £1bn in net revenue finding its way to the black market.
• “Sloppy and selective”
RP: Not only is the economic modelling and industry knowledge in the report demonstrably poor, the underlying assumptions on participation and harm are also sloppy and selective, in our view.
Raising MGD to 40 percent is a counter-productive policy based upon a poor use of evidence and false arguments.
Living proof of this is also occurring in the Netherlands, where a 37.8 percent tax rate is yielding far less than expected because of land-based declines caused by closures
• Is this a credible plan for
economic growth and raising Treasury revenues?
RP: Adult Gaming Centres: c. 1,300 of 1,450 AGCs will close; the remaining outlets would generate c. £750k of Cat B machine income each, or £115m of revenue.
This means the MGD yield at 40 percent of £115m would be £64m lower than the current £110m generated.
And c. 13,000 people would lose their jobs in addition to the lower tax yields from the sector
Betting Shops: c. 4,000 of c. 5,500 betting shops will close; the remaining shops would generate c. £400k of Cat B machine income each, or £600m of revenue.
This means the MGD yield at 40 percent of £600m vs. 20 percent of £1,200m would be exactly the same.
But c. 25,000 jobs would be lost and horseracing would lose c. £100m in Media Rights income and Levy
• Does the ‘Lies, damned lies and statistics’ rule apply?
RP: Having failed to control for the quality of the data, the SMF blunders on by:
i) mistaking correlation for causality where costs are concerned (despite warnings from the OHiD and OSR);
ii) attributing all of the costs associated with machine players to gaming machines. This ignores the fact that the machine players with problem gambling in the survey had exceptionally broad gambling repertoires.
• And what about the broader base of the machines market?
RP: report makes no mention of the impact that the hike in duty would have on social clubs, working men’s clubs, miners’ welfare clubs and political clubs, which are permitted to instal Category B4 machines (£2 maximum stake; £400 maximum prize).
It is unclear what the impact on these venues would be but i) any increased costs are likely to cause some damage; and ii) it is telling that the SMF appears not to have even bothered to find out.
• “None of the SMFs proposed mitigators therefore stand up to scrutiny”
RP: The very best HMRC can therefore hope to collect for HMT with a 40 percent MGD on Category B machines is roughly the same amount in direct MGD taxes, but at massive economic and financial costs to high street employment (c. 43,000 direct jobs lost) and British horseracing (c. £100m of critical funding lost).
• And the conclusion is?
RP: Given how shoddy the report is, it is vital that key stakeholders dig deeper than the performative and emotive headlines to assess the detail.
There they will find that weak analysis of disjointed and poorly understood evidence leads to a policy recommendation that would be disastrously counter-productive for the UK government from a direct tax perspective, cripplingly costly for GB horseracing, put over 40,000 people out of work, and further support the growing criminal black market.
Nobody wins except those who seem to want to wilfully harm the licensed gambling industry and its consumers without having to pay the price.
Read the Regulus assessment in full:
https://us12.campaign-archive.com/?u=11e46177bd4f7bdadef4f93d3&id=d5391076ae
Originally published on Coinslot on July 6, 2026. Republished with permission.