The think tank leading the charge to double Machine Games Duty (MGD) is facing awkward questions after a draft of its flagship report surfaced online, complete with internal comments from its most senior staff.
The timing could hardly be worse for the Social Market Foundation (SMF). Chancellor John Healey delivers his Budget on Wednesday 28 October, and a rise in MGD is widely expected.
The draft was published on Tuesday by Guido Fawkes, the irreverent Westminster gossip and political news website founded by blogger Paul Staines, which has built its reputation on leaks and scoops that embarrass politicians. Guido said the draft had been accidentally published with staff comments intact.
What the comments say
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 £275million –£458 million a year. iGB covered its launch at the time.
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 published by Guido Fawkes, chief economist Gideon Salutin replied that there was no guarantee individual workers would, but that employment nationally would grow – adding that he believed the wording was right.
On crime, Bertram warned colleagues against overstating causality. Salutin responded that a causal link was “unclear, so I’ve changed it to correlation.” He also accepted that the tax would hit bingo halls and seaside arcades, and dismissed fears of a shift to the black market.
The phrases Guido quotes from the draft on closures and job losses also appear in the published report, and the final version describes machines as correlating with gambling-related crime.
The SMF had not responded to iGB’s request for comment at the time of publication.
Industry piles in
Greg Knight, CEO of retail bookmaker Jenningsbet and a member of the Betting and Gaming Council (BGC) executive committee, wasted no time. “The Social Market Foundation has been totally discredited,” he wrote on LinkedIn, accusing the think tank of using tax “as a smokescreen” to see gambling abolished.
Not every claim stands up to scrutiny. The published report already concedes that closures could cost jobs in the sector, and the draft shows a causal claim being softened rather than an admission of no evidence at all.
Carl Templeton-Smith of CTS Retail & Equine Consulting turned his fire on Westminster. “This really is a damning indictment of policymaking if MPs are relying on research without fully scrutinising the evidence,” he commented on LinkedIn. It is a pointed remark: Alex Ballinger MP, who led a letter from 90 Labour MPs demanding a 40% rate, also wrote the report’s foreword.
Helen Walton, founder of G.Games, went further, suggesting that some of those producing and using the data “know it’s made up but choose to present it anyway”.
The internal comments published by Guido Fawkes show claims being challenged and reworded, but do not show any figures being invented.
A BGC spokesperson told City AM that the reported internal comments ‘raise serious questions about the evidence being used to justify further tax increases.
Budget showdown
The row lands as the industry braces for a second successive Budget blow, after Remote Gaming Duty rose to 40% in April. 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.
Reports suggest Healey may settle on 25% rather than 40%. Either way, the SMF’s defenders will argue the comments show an editorial process doing its job. Its critics now have a fresh weapon going into Budget week.