Taxing gambling machines to enhance public and private revenue

Garrett, T., Vaughan Williams, L. ORCID: 0000-0002-9639-9217 and Paton, D., 2020. Taxing gambling machines to enhance public and private revenue. Kyklos. ISSN 0023-5962

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Electronic gambling ('slot') machines are a key component of the global gambling industry. We introduce a theoretical framework which shows that under reasonable assumptions, shifting from a per-machine licence fee to a gross profits tax (GPT) on machine revenue can help to resolve policy tensions between industry profitability, economic growth and government revenue. We test the theory using data on recent changes to gambling taxation in the UK, in particular the move to a gross profits-based Machine Games Duty (MGD). Our results reveal that the shift from licence fees to a revenue-neutral MGD led to a significant increase in the number of machines, as predicted by the theory, and in machine revenue. These results provide useful guidance for all parties involved in the gambling taxation debate, especially those jurisdictions that are considering or are open to a change to their gambling tax system.

Item Type: Journal article
Publication Title: Kyklos
Creators: Garrett, T., Vaughan Williams, L. and Paton, D.
Publisher: Wiley-Blackwell
Date: 28 July 2020
ISSN: 0023-5962
Rights: © 2020 The Authors. Kyklos published by John Wiley & Sons Ltd. This is an open access article under the terms of the Creative Commons Attribution-NonCommercial-NoDerivs License, which permits use and distribution in any medium, provided the original work is properly cited, the use is non-commercial and no modifications or adaptations are made.
Divisions: Schools > Nottingham Business School
Record created by: Linda Sullivan
Date Added: 03 Feb 2020 12:05
Last Modified: 31 May 2021 15:18

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