Tax hike on slot machines slammed
The Government will introduce a new 20% Machine Games Duty (MGD) to replace the existing Amusement Machine Licence Duty and VAT, which equated to 17%, from February next year.
Simon Davies, analyst at brokers Collins Stewart, said the MGD would hit William Hill profits by around £11 million in the first year while Ladbrokes can expect a £14 million impact.
Mr Davies added: "The Budget has demonstrated the vulnerability of so-called 'sin' industries at a time when governments are under pressure to grow tax revenues."
The Chancellor also announced plans for a UK online gaming tax.
William Hill and Ladbrokes, which have moved their online operations to Gibraltar, will have to pay a 15% tax based on the location of the player rather than the location of their business.
Mr Davies said the online gaming tax was a "bigger concern" but the pain would not be felt until 2015.
The Association of British Bookmakers said the MGD was "unsustainable" at a time when bookmakers already pay more than £1 billion in tax each year. It said: "The Government made clear the premium it places on economic growth. This measure does not protect jobs or provide the sector with incentives for growth."