BGC Warns Over Proposed Remote Gambling Taxes Changes
The government is considering a major change to how gambling companies in the UK are taxed, but the industry has warned about the potential impact on operators.
> Taxes could be changing for the UK’s gambling industry. © Markus Winkler, Unsplash
Key Facts:
- Labour is continuing to work on proposed changes to how the gambling industry works in the UK
- A new gambling statutory levy has already been introduced
- Labour is now considering a single remote gambling tax
- Industry bodies have warned over the potential impact
The Department for Digital, Culture, Media & Sport (DCMS) published a White Paper, ‘High stakes: gambling reform for the digital age’, two years ago.
Various reforms were put forward in the white paper, and the government is now proposing to bring in a new single remote gambling tax for UK operators.
The government has now further laid out its case for reform, with DCMS arguing in a recent statement that changing to a new single duty will provide “tax certainty and increase simplification for remote gambling”.
The government has already introduced a statutory levy for the gambling industry, with the Gambling Commission recently revealing more details about how it will work.
‘Utterly Self-Defeating’
The industry is likely to push back firmly against the plans for a new single remote gambling tax, with trade bodies already lining up to speak out against the proposed reform.
CEO of the Betting and Gaming Council (BGC), Grainne Hurst, described a potential increase in taxes as an “utterly self-defeating” move for the government.
Hurst argued that raising gambling taxes would be “making a mockery of their growth strategy”, with many British people feeling the pinch due to economic policies.
The BGC chief executive said horse racing would be particularly badly affected by tax changes.
Hurst said in a statement: “Any potential further increase in taxes on our members, so soon after a white paper which cost the sector over a billion pounds in lost revenue, will not raise more money for the Treasury.”
“If general betting duty (GBD) is raised to the same level as remote gaming duty (RGD) under one new tax, it would be catastrophic for racing’s fragile finances.”
How Are Operators Currently Taxed?
RGD is charged at 21% of operator profit, while GBD is at 15% of profit.
Pool betting duty, meanwhile, is charged at 15% of net stake receipts, with the government arguing a simplification of gambling taxes is required.
Some experts have suggested taxes could all be moved to the same rate of 21%, which would be a significant hike for some operators to swallow.
In the government’s statement on the launch of the consultation period, which is expected to run until July, the exchequer secretary to the Treasury, James Murray, argued moving to a new singler remote betting and gaming duty would “create a simpler, streamlined system that is easier for operators to navigate”.
But operators will fear tax increases even though the gambling industry is already contributing £3.4 billion in taxes each year.
The government is expected to finalise its plans to amend gambling taxes in this year’s Budget.
