Uk Gambling Tax Increase

October 2017 to September 2018, saw the GGY, OR Gross Gambling Yield, of the UK’s gambling industry hit a staggering £14.5bn. Gambling enterprises are required to pay the UK government a minimum of. The gambling industry is seen as an easy target for the Government as it looks to raise funds for HM Treasury in the aftermath of COVID-19 New measures could see regulator base fines on a company.

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• Uk Gambling Tax Increase 2019

UK Chancellor Philip Hammond has the offshore gambling industry on his radar as he plans for a tax increase later this month. This is a move that will not go down well with offshore gaming operators and will cause a lot of unrest in the online gambling industry in the UK.

Hammond has planned on increasing the taxes paid by overseas remote-gaming operators who provide games like poker, roulette and blackjack. Government aides admitted that such move is expected to raise roughly £1 billion over a five year period.

The government’s concentrated effort on cracking down fixed-odds betting terminals (FOBT’s) stirred up massive controversy as high street bookmakers have stated that it would cut their revenue in half. The UK Government decided to proceed nevertheless and this will undoubtedly create a black hole in their budget; thus the money from the tax increase on offshore gambling operators can and should help fill the gap.

Last summer, ministers announced their plans on cutting the maximum FOBT stake from £100 to £2 in the hopes of dealing with the problem gambling following a long and heated discussion amongst legislators. These FOBT machines reportedly bring in over £1.8 billion in revenue and the exchequer receives around £400 million in the form of taxes. That is a lot of money for the government and hence why a number of legislators opposed the dramatic cuts on FOBT odds.

Revenue-Raising Measures

Uk Gambling Tax Increase Limit

The offshore gaming industry is prepared for Chancellor Hammond to lift their gaming duty from its present level of 15 percent of “gross gambling yield” to anywhere between 20 to 25 percent. Should this be the case, it will cause a major headache for the likes of William Hill and Ladbrokes.

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The two operators who have a major presence in the UK will be hit by the FOBT cuts. Should the tax on offshore gambling operators be increase, both Ladbrokes and William Hill will take a hit since their online gambling operators are based out of Gibraltar.

Philip Hammond is expected to announce an assortment of revenue-raising measures on October 29, as he pursues to show a Budget that will help end years of austerity. The UK government is also set to introduce a multi-million pound advertising campaign aimed at promoting responsible gambling. Public Health England will also launch a study to check out the impact that gambling is having on public health. The Gambling Commission has also push for stringent measures to be imposed on online gambling operators including stronger age-verification rules.

Carolyn is our legislation expert, with a background in law she is able to cover the current state of gambling around the world

UK gambling tax will go up to 21{44b09f69e02b4a9880bf6e3f987d2afd285263f93639dabf176d3ae6ad2c79c6}, posing new difficulties for the industry in the country. The measures are coming into effect in October, 2019

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New Tax Challenges for the UK Gambling Industry

On Monday,October 29, the UK Treasury convened to decide on a number of issues regarding the future budget. Chancellor Phillip Hammond was among the attendees who delivered a set of proposed measures that affect the gambling industry specifically.
During his budget speech, Mr. Hammond noted that there would be a rise in the Remote Gambling Duty (RGD), which will target all iGaming operators offering anything from video slots, and their variations, to blackjack and poker.
This move is planned as a specific way to offset any losses in tax revenue that may ensue from the fact that businesses operating fixed-odds betting terminals (FOBTs) have been asked to reduce the maximum stake from £100 to £2, which may have a significant impact on how much income gambling operators register once the measure comes into effect.
The rate was increased to 21{44b09f69e02b4a9880bf6e3f987d2afd285263f93639dabf176d3ae6ad2c79c6} from the current 15{44b09f69e02b4a9880bf6e3f987d2afd285263f93639dabf176d3ae6ad2c79c6} levels. The government estimated that by revving up the tax rate, the coffers will get additional $166 million in the next two years, and this number will go significantly up in the two years after, with the raked-in tax going up to $326 million.
Despite the new changes, though, there has been no exact time frame as to when FOBTs’ £2 regulation will trigger whereas the new tax hike is arriving in October 2019.This lack of consistency has worried business representatives who have been eager to get exact date so that they may prepare fully for the upcoming regulatory changes.

The Remote Gambling Association Advises Caution

While the debate still raged, one body, to name the Remote Gambling Association (RGA), made significant efforts to caution the government against any rushed-up decisions to bring the tax rate too high.
The RGA pointed out that anything beyond the 20-per-cent-threshold would squeeze businesses to the point that they may need to start cutting jobs, which in turn, may lead to the Treasury losing tax money.

The UK is a mature market now. The increase in regulation and tax burden are making it less attractive. – RGA Executive Clive Hawkswood

Uk Gambling Tax Increase 2019

According to RGA chief executive Clive Hawkswood, the UK market has reached maturity, which naturally means that legal and regulatory measures will be toughening up and readily squeezing established companies for extra pennies, while putting a life-threatening pressure on smaller operators.
As the information we now have stands, the changes to FOBTs may also come into effect in October, 2019 to coincide with the mulled changes in the tax law. This gives businesses one year to fully prepare for the oncoming spate of regulatory changes.
These changes may affect certain businesses in an unpredictable way. For instance, now GVC-owned Ladbrokes may have to reconsider how it pays to shareholders from FOBTs in light of the new regulation.
There are many unknowns further down the road that will need answering and while business prepares to meet regulation, new challenges rise on the road ahead.