Gambling: Bookies complain as tax levied on betting machines

Britain's bookmakers took a blow when the Chancellor imposed licence fees on their betting machines, a move that will cost the industry tens of millions of pounds, and increased the tax on one-armed bandits at arcades and clubs.

From 1 August, bookies will have to pay an annual licence duty of £1,965 per machine on electronic fixed-odds betting terminals (FOBTs), on top of VAT. There are about 20,000 machines across the UK.

Karen Potts, a tax partner at Deloitte, said: "Bookmakers are getting their worst-case scenario. They've deferred the pain until 1 August, but it will be painful."

A spokesman for Ladbrokes, which has about 6,800 FOBTs, said: "The rate is slightly higher than expected but it's also coming later than expected." He said the company would be hit by £3m this year and £11m next. William Hill said the impact on its figures would be slightly higher as it has 7,500 machines.

Gordon Brown also set an annual duty of £5,000 on the new unlimited-stake and prize machines that will be allowed in Britain's one proposed supercasino.

Annual taxes also increased to between £735 and £2,500 per machine for arcades, bingo halls, casinos, clubs and pubs.

The increase on clubs' jackpot machines will hurt non-profit making sports clubs which are heavily reliant on the money. The tax rise also hits pubs hard whose income from fruit machines is already down.

* Treasury Budget site

* Chancellor's Statement in full