Offshore online gambling companies are facing a 21 percent tax on revenue from the UK under a plan announced by Britain’s finance minister Philip Hammond.
Hammond told parliament of the increase, which is designed to offset losses in tax revenue when the UK moves forward on cutting the maximum bet allowed on fixed odds betting terminals from £100 to £2.
“I can confirm that we will increase Remote Gaming Duty on online games of chance, to 21 percent in order to fund the loss of revenue as we reduce FOBT stakes to £2,” Hammond told parliament.
The reduction in FOBT stakes is now expected to go into effect in October 2019 to coincide with the implementation of the new taxes, according to a policy paper released by the Treasury. The move would cost the Treasury £270 million in lost tax revenues by 2023/24, according to the paper.
According to the UK Financial Times, The Treasury estimates that the increase in the tax on “gross gambling yield” in an additional £130 million in tax revenue in 2019-2020 and £255m in 2020-2021. That would offset the £120m and £245m loss of tax in the same years.
Clive Hawkswood, chief executive of the trade body the Remote Gambling Association, told the Times that gambling companies could look abroad to make up lost revenues.
“The UK is a mature market now. The increase in regulation and tax burden are making it less attractive,” he said.
Hawkswood and other analysts said the change will hurt smaller gambling companies, which could lead them to exit the UK market.
The delay in implementing the FOBT cut has brought criticism from advocates who pushed for it in the first place. The cuts were announced after a long lobbying effort by advocates and groups fighting problem gambling in the UK. The FOBTs, which play much like slot machines, were labeled the “crack cocaine” of gambling and with a £100 maximum bet advocates said problem gamblers could lose thousands of pounds in a matter of minutes.
The cuts were announced in May, but plans to implement them were first scheduled for April 2019, which has now been pushed back to October.
The delays are designed to allow UK bookmakers to prepare for the change, government officials have said. However, many UK MPs who pushed for the change have been sharply critical of the delays.
The delay to introducing the reduction in the maximum stake was condemned by MPs including Tom Watson, the deputy Labour leader.
“By rolling back on their promises, the government are allowing greed to triumph over good as the bookies trouser an additional £900m in revenue,” Watson said in a press statement.
Prime Minister Teresa May’s office said the October deadline was a balance designed to protect workers in the gambling industry. Several major UK bookmakers have warned that the cuts will lead to layoffs in the industry.
In another story, the Irish Bookmakers Association announced it is uniting with the British gambling industry to take part in Responsible Gambling Week 2018.
The event is held in the first week of November and is supported by more than 800 bookmakers and head offices in Ireland including the Irish Amusement Trade Association, Horse Racing Ireland and both the Irish Greyhound and Horse Racing Tote, organizers said in a press release.
The event is organized by the IBA and the Industry Group for Responsible Gambling in Britain.
It is bringing together almost every sector of the gambling industry, covering online gambling operators, amusement arcades, bookmakers, tote operators, and Irish race tracks: all with the common objective of raising awareness of responsible gambling behaviors and encouraging staff, customers and the wider public to discuss what it means to gamble responsibly.
“We are delighted to be partnering with the IGRG and joining forces for Responsible Gambling Week in November,” said Sharon Byrne, chairwoman of the Irish Bookmakers Association in the release. “Following our very successful Responsible Gambling Week here in Ireland last February, it is a logical and progressive step to join forces with the UK campaign.
“The week is all about having that conversation, raising awareness on gambling responsibly, and on how to access help or support for those who need it. Merging both campaigns can only help to increase the impact and reach of the campaign and ensure maximum coverage for the week,” she said.
