The millions in charitable contributions U.K.’s gaming operators make annually could be forced on them as a tax, the Daily Mail reported. It’s really inaccurate to call the contributions voluntary, since they are required by gaming regulations. However, they aren’t mandated as taxes—yet.
The Mail quoted an unnamed member of the government.
The source asserted that the long-expected white paper—launched in December 2020 and expected after Easter—updating the Gambling Act of 2005, may include a new tax that would be earmarked for the National Health Service (NHS).
The NHS—and many researchers who benefit from contributions— as policy refuse donations from the industry, deeming them a conflict of interest. If the funding source was a tax, apparently, the NHS would have no objection.
Operators must now contribute to “one or more organization(s) which deliver research, harm prevention and treatment for those harmed by gambling.” Because contributions vary widely, the government wants to even them out so similar organizations benefit about the same.
The report didn’t indicate how large a tax is being contemplated by the U.K. government although it would likely be based on operator revenues. Past discussions have indicated that gaming companies would pay more than they do now to fund programs—such as GambleAware— to treat gambling addiction problems.
The Mail quoted the government source: “The gambling white paper will be the most comprehensive review of betting laws in more than 15 years.” It added, “’Its purpose is to ensure that our gambling laws are fit for the digital age, because the landscape has changed significantly since the Gambling Act in 2005.”
Said the source, “’The plan is to give people the choice and freedom to gamble responsibly, while preventing addictive and harmful gambling. One of the main ways will be through the introduction of a new levy.”
Problem gambling is estimated to be less than 0.2 percent by the U.K. Gambling Commission (UKGC.) The industry’s required annual contributions exceed $123.18 million.
A possible wrinkle in this new tax: When Prime Minister Rishi Sunak was Chancellor of the Exchequer, controlling the purse strings, he opposed such a levy.
According to the Mail: “Rishi opposed it on the grounds that we pay billions in tax already and he didn’t want to look as if he was in favor of new ‘nanny state’ taxes on business.”
Sunak reportedly opposed such a tax because he had the Catterick racetrack in his constituency.
Michael Dugher, chief executive officer of the Betting and Gaming Council of the U.K., supports the new tax. “I support this voluntary levy now becoming mandatory and have proposed that for all BGC members, so we are not against this in principle,” he said.
He added, “I have said for some time that I am relaxed about a so-called statutory levy given that the money is already on the table from BGC members, it is already allocated independently of the industry and given that it was the BGC who proposed to government last year that contributions should be mandatory.”
The tax idea comes weeks after UKGC levied a record fine of £19.2 million on William Hill for allegedly failing to protect bettors from spending too much and getting into catastrophic debt.
The Sunday Times reported that affordability checks, aka credit checks, will also be part of the new gambling regime. Sportsbook operators will be required to do automatic background checks on patrons who spend “moderate sums,” said the Times. “Moderate” has yet to be defined, and the definition could be somewhat plastic at this point.
A study by YouGov of 1,007 bettors said 65.4 percent would oppose providing pay slips, bank statements, etc. to show their creditworthiness; with 34.6 percent saying they would willingly provide such documentation.
However, according to the Times, a government source said, “We are working to ensure these checks are easy for customers and operators, with no burdensome requirements like sharing payslips or bank statements.”
According to sports betting community platform OLBG’s CEO Richard Moffat, “Most bettors who have been asked to provide documents have done so.” He added, “More importantly, very few of those who were asked stopped gambling or went to the black market, the latter being the worst unintended consequence of measures aimed at making gambling more responsible.”
Moffat concluded, “Therefore, there is now a big question mark over what might happen if affordability checks become mandatory and all licensed operators have to impose them at certain levels.”
The process of adding these taxes and requirements would include a consultation period.
