The United Kingdom’s gambling industry is set to take a further hit from last year, what with the proposed increase of the remote gambling duty. The gambling tax levied on bookmakers in the UK currently stands at 15% POI.
The proposed tax increase will raise the current online gambling tax (15%) to 21%. Industry experts believe this move could be devastating for companies across the UK. The already high taxes have seen the UK gambling industry incur a massive commercial loss of £1billion in the past five years, in the form of Government taxation. Industry insiders believe the new tax, once enforced, will lead to losses increasing upwards of £1.25 billion.
What could potentially be more harmful to companies and bookmakers than the increase of the sin tax (or exacerbate its negative consequences on the UK gambling industry) is the Government’s decision to reduce the Fixed odds betting terminal (FOBT) starting stake from the traditional £100 to £2. This move, once enforced, will lead to massive losses in commercial earnings in the billions. In addition to this, the treasury and exchequer will also incur a loss of £1.15 billion in revenues.
While this move was initially questioned for its practicality by industry officials, the news of the increased sin tax has cleared the air. This double attack on revenues and profitability have led to widespread dissatisfaction and indignation in the UK gambling industry. While the sin tax makes up for the losses the Government will incur through the FOBT crackdown, this double financial drain will have seriously devastating effects for companies rendering gambling and gaming services.
According to Finance Minister Philip Hammond, these moves are intended to improve the condition of the UK gambling industry. Reports indicate that the Government will funnel these earnings through taxes back into the industry. How and when they will do so remains to be seen. For now, both the new sin tax and the reduced FOBT stakes will be officially implemented come October 2019.
The companies that stand to lose the most and experience the brunt of losses are bookmakers William Hill, booking company Paddy Power Betfair, gambling company 888 Holdings, and the online gaming company GVC Holdings – each of whom is the biggest revenue generators in their niches.
Source – Igaming world