US casino group joins call for big cut in UK gaming tax
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Your support makes all the difference.A second large American casino group has broken cover to demand a reduction in UK gaming tax as a condition of agreeing to back the Government's plans to deregulate Britain's betting industry.
Isle of Capri, one of America's top 10 quoted gaming groups with annual revenues of $1.2bn (£663m), has called for the Government to cut taxes on large casinos in the UK from 40 per cent to 15 per cent.
Tim Hinkley, the company's president and chief operating officer, said big US casino groups would only invest large amounts in the UK if they could generate a satisfactory return on capital. That return, said Mr Hinkley, would require UK gaming taxes to come down by more than half.
The Government hopes that gaming deregulation will create upwards of 100,000 jobs, while economists believe freer gaming rules could boost public finance contributions by £3bn a year and attract £5bn of inward investment.
But Mr Hinkley warned the UK against repeating the mistakes of some US states, where high taxes had killed off development and job creation. Most new investment had flowed into those states with the lowest taxes, such as Nevada, he said.
"It [UK tax] is too high," Mr Hinkley said. "The numbers only work if you can get a decent return on investment. We think tax should be no more than 15 per cent of gaming revenues."
Mr Hinkley's comments come just over a month after MGM Mirage, the Las Vegas casino operator, said the current UK tax rate on casinos would be prohibitive to the type of large-scale gaming developments envisaged by the Government. MGM mounted a £260m takeover bid last week for Wembley, the UK gaming group, and has already signed casino development agreements in the UK pending deregulation.
Last year, the UK Government announced plans to liberalise the British gaming industry, locked in regulations from the 1960s. It is backing the development of Las Vegas-style resort casinos and the expansion of regional casino operations.
The Government has remained tight-lipped about whether it will be willing to agree to the Americans' demands. However, the subject of tax will be of central importance as the industry and MPs hammer out the details of the proposed new Gaming Bill, which could be on the statute books by the middle of next year.
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