Higher Taxes on the Industry
The UK Treasury is pressing ahead with proposals to overhaul the country’s remote gambling tax framework. The aim is to move towards a single duty system, sparking fierce debate in the industry and amongst sporting bodies.
Originally introduced by HMRC in April and formally concluding consultation last week, the latest proposal would replace the current three-tax regime with a unified levy. Currently the three tiers consist of General Betting Duty (GBD), Remote Gaming Duty (RGD), and Pool Betting Duty (PBD). Treasury officials believe the reform would simplify the taxation and reduce unnecessary bureaucracy.
Meanwhile Labour MPs are using the proposal as an opportunity to push for higher taxes on the gambling industry. The Chancellor OfThe Exchequer, Rachel Reeves, faces mounting pressure to levy the industry and extract more money from the sector.
Former Chancellor and former Prime Minister Gordon Brown has also called for higher gambling taxes. While writing on child poverty in The Guardian in May, he said: “Only a budget in which, for example, a gambling or a banking levy can be announced, can generate the more than £3bn that would cover the estimated cost of abolishing the two-child cap”.
Unintended Consequences
Gambling industry stakeholders have warned that any tax rise could harm their profits and drive players towards the black market. Betting & Gaming Council CEO Grainne Hurst told the Financial Times that an increase in duty would compromise the gambling industry’s support of growth, sport, jobs, and the general economy.
She also referred to regulated betting as one of Britain's few global business success stories. Other British global success stories include the BBC, Rolls-Royce, Marks AndSpencers, Tesco, Virgin, Dyson, Brewdog, ASOS, Cadbury’s, British Airways, Burberry, Gordon’s Gin, along with many more internationally successful businesses started in the UK.
Horseracing Under Threat
The proposal has also raised alarms within the horseracing sector. UK Racing claims the new system could result in a £330 million loss across five years,that’s 66 million a year. UK Racing also said it would put nearly 3,000 jobs at risk.
The British Horseracing Association (BHA) has launched a national campaign petition called “Axe the Racing Tax”. According to a study by the same group, submitted to the Government during its Gambling Act review, the racing industry has “direct revenues in excess of £1.47 billion”. Based on those figures, losing £66 million a year would reduce its annual value to £1.41 billion.
Acting BHA chief executive, Brant Dunshea, warned that unifying betting duties could deliver one of the gravest blows to the sport in its history, threatening jobs, communities, and what he called a cherished national institution. In December last year, a report indicated the global horse racing industry is expected to experience a CAGR rise of 7.45% in the next five years. This would take the UK racing industry to a yearly value of £2.11 billion.
The All Party Parliamentary Group on Gambling Reform, campaigns like Gambling With Lives, and think tanks like the Social Market Foundation argue that gambling taxation should reflect the harm associated.
