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Remote Gambling Duty Increases to 21% in October, 2019

With the recently concluded Budget meeting, British Chancellor of the Exchequer Phillip Hammond has announced new measures that will affect gambling businesses in the United Kingdom, with a tax hike confirmed and looming.

Operators to Pay More Tax in October 2019

In an anticipated tax hike, British Chancellor of the Exchequers Phil Hammond revealed that operators that run business in the country will be expected to pay a higher percentage of their revenue as tax. The meeting took place on Monday, October 29, with the gambling tax being discussed as a way to offset the consequences of the Fixed-Odds Betting Terminals (FOBTs) changes.

The aforementioned, as reported, underwent a significant readjustment which caused industry experts and business owners to issue dire warnings to the government. The Remote Gambling Association (RGA) also cautioned against changed in the FOBTs’ maximum stakes from £100 to £2, but that fell on deaf years.

The RGA also commented that any tax hike should not exceed 20% if business was to cope. As if in defiance of that recommendation, the Government has decided to push up the numbers to 21%. The specific tax is called the Remote Gaming Duty (RGD) and it relates to revenue acquired through gambling activities.

The potential tax hike has long been on the cards with the United Kingdom’s government repeating time and again that the FOBTs’ revenue loss will have to be offset one way or another. Phil Hammond himself said when voting in favor of reduced FOBTs that the missing money will have to be found somewhere else. Mr. Hammond of course meant the companies that are involved with gambling activities.

The Great Unknown about FOBTs’ Schedule

What particularly worries business is the vague schedule as to when the FOBTs will have to actually be re-adjusted to £2 max stakes. Without having proper timelines, operators cannot plan closures nor relocate resources properly.

With uncertainty precipitating the problem, Mr. Hammond had little to offer. He said that it might be in April or it could potentially coincide with the tax hike in October. Two years are still floating as suggestions, 2019 and 2020. However, without specific information on to use as a reference, gambling operators cannot properly plan their future strategies. Everyone is preparing for the worst case scenario.

Before the Monday budget was announced, the RGD was rumoured to go as high as 25%. Repeated warnings by the Remote Gambling Association (RGA) may have helped, as the entity repeatedly reminded that business will be forced to possibly close vast swathes of its venues.

Meanwhile, industry leaders have approached the subject differently. Some were openly content that the tax did not hit the staggering 25% whereas others reminded that it had been yet another tax in recent pass, and thus the pressure put on the industry was high.

What remains to be seen is whether the numbers will pay off. The UK Government hopes to add as much as £130m in the period between 2019 – 2020, and additional £290 million in the period between 2021 -2022.

How will the business handle this remains to be seen with operators battening down the hatches and trying to stay ahead of adversity.

Mike Johnson

Mike made his mark on the industry at a young age as a consultant to companies that would grow to become regulators. Now he dedicates his week days to his new project a the lead editor of GamblingNews.com, aiming to educate the masses on the latest developments in the gambling circuit.