Will Gambling Taxes Be Increased By Labour
Published On 14th October 2024
Chancellor Rachel Reeves will deliver the new Labour Government's first budget on 30th October 2024 and speculation continues about how she and her party will make cuts and/or increase revenues from tax. And it's not good news for UK gambling operators who could be facing yet more increases in taxation. According to reports, The Government is reportedly considering raising certain gambling taxes for online gambling operators in the UK. The Guardian reports that Labour could potentially "double some of the taxes levied on online casinos and bookmakers". News of these proposals has hit share prices of operators such as Entain (Gala & Foxy), Evoke (William Hill), Flutter (Paddy Power) and Rank Group (Mecca).
What Are The Proposals
The Guardian suggests that the increases in taxes could apply to "higher harm" products such as online casino and sportsbook. Softer products such as bingo and lottery would be untouched. The proposals put forward by The Institute for Public Policy Research (IPPR) include doubling taxes such as the general 15% betting duty that's levied on high street bookmaker's profits. Remote gaming duty, which affects online operators could also be increased from 21% to a massive 50%. The thinking behind these proposals is that The UK have low gambling taxes compared to other countries. However the proposals are tempered by a comment from The Betting and Gaming Council which notes that "draconian regulations and disproportionate tax regimes" can result in a "spike in illegal black market gambling".
Will They Happen?
The UK Government is looking to fill a "£22billion black hole" so any revenues from non-direct taxation will be easy wins. Most certainly a lot of people won't lament increased taxes on the gambling industry. However concerns about black market gambling and the "potential impact on horseracing" need to be considered. It's interesting to see that bingo may avoid any further levies although this may be down to the fact that there's probably not a lot of profit or revenue left to giveaway without killing the game off online once and for all. The Guardian concludes their report that The Treasury wouldn't comment on their article, but as mentioned above, the specualation has made the stock market jittery when it comes to gambling operators. Many smaller companies have left The UK and if these proposals come in then we may see even further changes to the online gambling landscape.
A Further Blow For Affiliates
Changes in UK Gambling in recent years has seen many brands opt to stop working in country. The effect of new wagering limits on slots is probably unknown but further levies and taxes will definitely have an impact. Increased taxes and levies don't just impact operators. They also effect affiliates although share prices for XL Media, Catena and Gambling.com Group Ltd aren't down today compared to operators. However if operators are paying out more in tax then that leaves less in their profits. The Government blackhole may be filled up, but it creates other ones further down the line. One way to save money is for operators is to terminate affiliate agreements. They did it when levies and tax duties went up before and no doubt they'll do it again.
Pay To Enter Competitions
Whilst The UK Government looks to try and kill off online gambling, one area of wagering that continues to get away "scot free" is the pay to enter competitions sector. Just this week That Prize Guy celebrated creating a 9th millionaire through a pay to enter prize draw. McKinney Competitions, Bounty Competitions, Elite Competitions and many more regularly giveaway cars, cash, property, tech etc. They use techniques such as price adjustment, exciting imagary and urgency to create interest in sales. None of the platforms are regulated, responsible play isn't a necessity and most certainly there are no levies. Whether the pay to enter competition industry could generate worthwhile taxes for The UK Government is unknown, but "draconian regulations and disproportionate tax regimes" could benefit these platforms if punters want to seek out legit new markets and opportunities to "gamble" alongside black market gambling.
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