In the light of recently increased Government and regulatory bodies’ concerns over sports betting industry and its current status in the country, the UK Sports Minister Tracey Crouch has revealed her intentions to set a new gross profits rate for both retail and online bookmakers. Ms. Crouch informed the industry stakeholders that the Department for Culture, Media & Sport means to impose a gross profit charge estimated to 10% on all racing wagers, regardless of the fact if the bets are placed online or by using the services of a retail betting outlet.
The new rate system was announced in March 2016. The above-mentioned rates are lower than the 10.75% tax charged on the high-street bookmakers. Minister Crouch also shared that the new tax rates are expected to be beneficial for the sport, as they are very likely to generate an amount close to the £100 million that have been needed by the racing industry.
In the period between 2011 and 2013, a new levy scheme was imposed, with the taxes being increased from 10% to 10.75%. It was exactly the increased tax rate that enables the process of getting a special approval under the European rules concerning state aid issues.
The thorough examination and monitoring of the levy scheme has had an impact on the sports betting and racing industries, making them split. Both industries have been relentless and persistent on the new taxes scheme after they were first published two years ago. Now, the four largest retail betting operators – William Hill, Ladbrokes, Coral and Betfred – are expected to implement the new levy terms in their web-based betting operations.
In addition, the bookmaking companies in the UK have publicly responded to the competent authorities that have been imposing bans on them, stripping them off from some advertising and sponsoring racing events for failing to implement the new levy schedule. They also protested against the Authorised Betting Partner scheme.
Following the announcement made, Sports Minister Crouch is expected to meet separately with both official representatives of betting and racing operators until the end of the week. In addition, betting and racing officials have been provided with the chance to make their final written representations and have deadline until November 4th to present them.
- Author
Daniel Williams
