Stewart Kenny, co-founder of Paddy Power, has challenged warnings from Betfred’s founder Fred Done about the potentially severe impact of higher taxes on the UK gambling sector, dismissing them as exaggerated scaremongering. The dispute comes amid government proposals to double the machine gaming duty (MGD) to 40 percent, a move critics say could drastically affect high street bookmakers.
Done, whose Betfred chain is among the UK’s largest gambling operators, cautioned last week that the proposed tax increase would render many shops unviable. He estimated that 495 betting outlets would close by 2030, resulting in the loss of 2,575 jobs and £67 million in lost tax revenue from those locations. Betfred, already facing difficulties after previous tax hikes on online gaming, has announced 132 shop closures and warned that rising costs threaten its long-term retail operations.
In response, Kenny, who stepped down from Paddy Power’s board in 2016 and now publicly critiques the industry, accused Done of recycling familiar arguments previously used to resist tax rises. Kenny pointed to earlier predictions that did not materialize following restrictions on fixed-odds betting terminals. He emphasized the need for a nuanced approach to taxation, arguing that more harmful betting products, such as gaming machines designed for rapid play and featuring near misses, should be taxed more heavily than traditional wagers on horse racing or football.
Kenny asserted that targeted taxes on higher-harm machines could discourage operators from promoting addictive products, while preserving lower-risk betting sectors. “What is needed is intelligent, not blanket, taxation,” he said, advocating for differentiated policies that protect racing and other lower-harm betting forms.
Betfred, which reported revenues of £1.45 billion and operating profits of £209 million in the 18 months leading to March 2025, is among Britain’s biggest taxpayers. The company paid £242 million in tax in 2025 alone. Fred Done and his brother Peter, who runs the family’s Peninsula business, collectively paid £400 million in taxes last year, making them the country’s largest individual taxpayers according to the Sunday Times Tax List.
Done expressed significant concern over the sector’s future, stating he had “never felt so gloomy” about the country’s outlook. The threat of elevated taxes has already led Betfred to end its decade-long sponsorship of rugby league’s Super League and delay plans to renew its support for horse racing. Slot machines, which generate half of Betfred’s shop profits, are particularly vulnerable to increased taxation, which the company said would make such sponsorships unsustainable.
Industry groups caution against selectively taxing online or machine betting, arguing the integrated financial structure of operators means pressure on one segment affects the entire business. A spokesperson for the Betting and Gaming Council noted that tax and regulatory burdens on one area inevitably influence decisions across both online and retail operations.
The Treasury Select Committee chair Meg Hillier has previously accused the gambling sector of employing scaremongering tactics when opposing regulatory changes, a charge echoed by Kenny in his letter. As the government weighs adjustments to gambling taxes, the debate highlights competing views within the industry about the balance between protecting public health and sustaining the economic viability of betting shops.