The UK gambling industry suffered a serious blow yesterday, at the time when the new budget was announced, with the UK Treasury revealing that it is to impose a 6% tax increase to online gambling operators.
Chancellor Philip Hammond shared that the increase of the remote gaming duty paid by operators which offer online gambling services is expected to compensate for the expected revenues losses which are set to occur as a result from the crackdown imposed on fixed-odds betting terminals (FOBTs).
Due to the planned change, the remote gaming duty is to be increased from 15% to 21%, which is expected to bring an additional amount of £130 million in 2019/2020 to the UK Treasury. A year later, in 2020/2021, the amount is expected to be £255 million. As announced by the Treasury, the increase is most likely to almost directly offset the tax revenue loss that is set to occur due to the implementation of the FOBT crackdown. The projected loss will be in the range from £120 million to £245 million.
“I can confirm that we will increase Remote Gaming Duty on online games of chance, to 21% in order to fund the loss of revenue as we reduce FOBT stakes to £2.” – Chancellor Philip Hammond said
Apart from the tax increase, Chancellor Hammond further announced that the implementation of the FOBT stakes’ reduction would be put back until October 2019 and will coincide with the remote gaming duty increase. As Casino Guardian has already revealed, the change in the FOBT regime was initially expected to be rolled out at the end of April 2019 but the authorities have decided to give six extra months to local gambling operators to prepare.
Carolyn Harris, Chair of the FOBT APPG reacts to the news that the £2 maximum stake will only come into force in October 2019. #CutTheStakesNow pic.twitter.com/AM5RnRmsaa
— FOBT APPG (@fobtappg) October 29, 2018
Bookmakers to Generate Further £900 Million Due to FOBT Crackdown Delay
Back in May 2018, the UK Government’s Department for Culture, Media and Sport (DCMS) announced its decision to slash the existing maximum stake of controversial fixed-odds betting machines from £100 to £2.
According to UK Treasury projections, the lost revenue from the machine gaming duty imposed on the machines is expected to cost the exchequer a total amount of £1.5 billion in a five-year period. As mentioned above, Remote Gaming Duty paid by overseas operators who offer online games such as blackjack, roulette and poker, will be forced to pay a 21% tax instead of the current 15% one.
There are 430,000 people in the UK have with a gambling problem, and a further 2 million at risk of developing a serious gambling addiction. This delay will see more lives and communities ruined by problem gambling.
— Tom Watson (@tom_watson) October 29, 2018
As mentioned above, Chancellor Hammond told the Parliament that the Remote Gaming Duty is to be increased to help the authorities offset the losses which are expected to occur due to the FOBT maximum stake reduction to £2. However, Mr. Hammond was criticised for the delay of the crackdown implementation. Anti-gambling campaigners, including the deputy leader of the Labour party, Tom Watson, commented that the six extra months given to gambling operators to prepare for the changes will allow bookmakers to generate an additional revenue amounting to £900 million.
- Author
Olivia Cole
