Stakeholders in the UK’s gambling sector are currently divided over plans to increase tax on companies operating in the space. On the other hand, the CEO of the Betting and Gaming Council, Grainne Hurst, has warned that an increased tax on the industry will lead to revenue flowing out of the country.
This has been countered by the Treasury Committee, which has attested that the industry should indeed be taxed more and called the claims from the council scaremongering. This also comes as gambling patterns in the United Kingdom indicate more emphasis on online betting.
Will Greater Tax Harm the Ecosystem?
The argument being made by Hurst is that the current revenue being generated by the UK’s gambling sector will go elsewhere. The current Autumn Budget proposes increases to the tax rate, and the council believes that these could end up very substantial. Potentially, in-person betting establishments could see the tax rate go from 15% up to 30%. Online slots, in turn, could go from to 50% from 20%.
The latter is especially important as rates of online betting have been steadily climbing in the last few years. And consumers are going to get their needs met one way or the other. In the best-case scenario, they will turn to UK-based sites and spend their money there. If not, they might choose non-UK casinos and get their needs met there instead. After all, these sites tend to have the same types of games as those within the country.
(Source: https://www.cardplayer.com/uk/online-casinos/non-uk-casinos)
If this is done on a large scale, it could have significant financial implications. On top of this, it could put consumer safety at risk.
“Further tax increases on the regulated online sector risk undermining consumer protections by pushing players towards the unsafe, unregulated black market […] Independent analysis by EY shows such proposals could put over 40,000 jobs at risk, divert £8.4 billion in stakes to the black market, and wipe £3.1 billion from the sector’s contribution to the UK economy,” said Hurst recently.
Pushback from the Government
But while industry stakeholders are worried about the potential impact, the UK Treasury has minimized these claims. Referring to it as scaremongering, a significant number of Labour MPs have signed a petition calling for an increase in the tax rate and for the funds collected to be used to support disadvantaged families with limited benefits.
Ultimately, the decision made could end up setting the scene for the UK gambling industry for years to come. The growth of online gambling, in particular, means that many countries could end up with significant revenue in the process. If the tax is too high, as some have suggested, it could have the opposite effect, and the UK could very well lose out on the gambling market forever.
Ultimately, we will have to wait and see whose voice prevails and, of course, what the long-term outcome of the government’s decisions will be.
