The UK gambling industry continues to post impressive financial results. Will this continue in the future as there is stricter regulation. The industry also fears that tax rises could be on the way when the next autumn budget is announced.
With over £6.9 billion being generated in annual gross gambling yield (GGY), it is perhaps not too surprising that HMRC are taking action. Recently announced plans are aimed at creating a structure to replace the current three-level system. This they say will see the complexity, innovation and scale of the betting industry matched.
In their recent statement, HMRC stated that “the government believes that the time is right now to consider further reform.” This will create “a modern and coherent tax system that is simpler to use for the UK-facing remote gambling industry.”
There has been significant growth in the industry in recent years, mainly due to the growth in online gambling both for casino games and sports betting. GGY from UK remote gambling in 2023-24 was £6.9 billion and that’s over 60% higher than seen in 2015-16. However, premises-based GGY has seen a fall of 14% over the same period though the COVID-19 pandemic did make a contribution to that decline.
It was back in the 1960s when General Betting Duty was introduced. 18 years ago, Remote Gaming Duty (RGD) first had to be paid by the UK gambling industry.
The new proposals would see a Remote Betting & Gaming Duty be introduced. This would replace the current three-level tax rate system that is in operation. The RGD rate is 21% of operating profit. In addition to this, there is also the 15% on profit General Betting Duty (GBD) and a Pool Betting Duty (PBD) which is calculated at 15% of total net stake receipts.
As has been seen with recent changes introduced by the Labour government, a period of consultation is taking place before any concrete decisions. This is currently ongoing until July 21. A final decision is likely to be announced when the Chancellor makes her autumn budget statement in October.
The UK gambling industry has not responded well to the planned changes. Their fear is that all verticals, especially online bookmakers by gamblermedia.com listings will have a 21% duty thus increasing the amount of tax the industry will be paying. Tax lawyer Zoe Feller has commented on the subject and said the sector could become “economically unviable.”
Feller has called on the industry to ensure that their views are made clear during the consultation period. If their fears are expressed to the government, then hopefully they will be taken on board. If that does happen, the tax lawyer is hopeful that “a tax that actually functions and works” may be introduced. Another concern is the possible increased administrative costs that could be created by the tax changes.
Among those who have raised concerns over the recent announcement is Grianne Hurst who is the CEO of the Betting and Gaming Council. The view is that any tax rise would be “utterly self-defeating for the Government.” The CEO added that the policy would also “make a mockery” of the government’s desire to grow the UK economy.
It would also fail to see any additional funds being raised for the Treasury. Also, it would cause further damage to an industry that has seen “over a billion pounds in lost revenue” due to regulation being made stricter.
Recently there has been much reduced maximum stake limits imposed on online slots. The maximum stake for those aged 18-24 is now £2 and £5 for older players. There have also been stricter affordability checks imposed on players.
The BGC are concerned that such changes are driving players to the “unsafe gambling black market online.” That costs the licensed and regulated industry revenue and doesn’t help the Treasury as no tax is being paid. It is also putting gamblers at risk due to the lower levels of safer gambling protections that exist on the black market.
The advice of the BGC CEO to the government is to “listen to business and sport” during the consultation period. Not doing so could “drive growth, investment and jobs out of one of the UK’s few global business success stories.” The introduction of a mandatory levy of £100 million on UK gambling companies is also due to hit financial results.
Recent figures released by the UK Gambling Commission illustrate the success of the UK online gambling industry. The first three months of this year saw online GGY of £1.45 billion. That was a rise of 7% when compared to the same period in 2024.
