UK Industry Bolstered After Avoiding Remote Gambling Tax Hike

October 31, 2024
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UK gambling businesses received a massive boost after the government announced it would not be hiking remote gambling taxes for the time being. 
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UK gambling businesses received a massive boost after the government announced it would not be hiking remote gambling taxes for the time being.

Instead the government says it will consult on unifying the three different rates currently levied on different forms of online gambling into one single tax.

The UK Autumn Budget, published on October 30, states: "The government will consult next year on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV and radio) into a single tax, rather than taxing it through a three-tax structure. This will aim to simplify, future-proof and close loopholes in the system.”

HM Revenue & Customs, the UK's tax, payments and customs authority, clarified to Vixio GamblingCompliance that the three-tax structure refers to remote gambling duty, general betting duty and pool betting duty.

Grainne Hurst, the CEO of trade group the Betting and Gaming Council (BGC), welcomed the news.

“We have been clear, any duty rises now would have hit customers, prevented growth, risked jobs and bolstered the unsafe, unregulated gambling black market,” Hurst said.

He believes the government listened to the BGC, “got the balance right, and rejected calls from anti-gambling prohibitionists seeking to threaten jobs and growth”.

Stephen Hignett, a partner at law firm CMS, told Vixio GamblingCompliance: “Given typical consultation processes and timings, we suspect that new legislation is unlikely to be passed before 2026.

“We suspect that a unification of the rules will result in current rates being set at a single rate. Since General Betting Duty and Pool Betting Duty are currently levied at 15 percent, our assumption is that these rates will be increased to (at least) the current rate of Remote Gaming Duty, which is 21 percent.”

Changes to these rates would most likely affect fixed-odds bookmakers and pool betting providers, including horseracing and greyhound racing operators; however, clarification on these changes will not come until the consultation is opened.

The CMS gambling team said it will be looking out for “possible unintended consequences in the new rules. As with any new legislation, the devil will be in the detail.”

“Each of the UK’s three remote gaming duties have different idiosyncrasies, which exist primarily due to their different histories. Given that a unification of the rules will inevitably require these quirks to be ironed out, operators will need to consider carefully how such a unification may affect them,” Hignett said.

Last year's Budget, published in November 2023 under a different government, similarly promised to “consult shortly” on proposals to bring remote gambling into a single tax.

Rumors circulated in UK media several weeks ago that there would be an increase to the remote gambling duty, causing share prices in listed gambling businesses to nosedive.

Andrew Rhodes, the UK Gambling Commission chief executive, gave a keynote speech at the International Association of Gaming Regulators (IAGR) conference on October 21, where he downplayed the likelihood of a tax increase and highlighted the impact of the speculation.

“Recent media speculation in the UK at possible changes to gambling taxes wiped £3.5bn off the share value of our largest operators. A newspaper story,” Rhodes said.

Despite avoiding a remote gambling tax rise, Jamie Walters, CEO and co-founder of London-based affiliate business QiH Group, pointed out that the budget still was not necessarily good for businesses in general. 

“The rise in employer National Insurance contributions will be difficult for many small to medium-sized businesses, but is at least in keeping with Labour's pledge to protect the general working public from tax hikes,” Walters said.

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