Speculation Around Tax Hikes
The upcoming budget, the first laid out by the new Labour government since they took charge in July, has been one of the hottest topics in the UK in recent months. The near four-month gap between the election and the budget is the longest in UK history for a new government and has allowed much speculation over what it is going to look like.
One rumoured change is an increase in taxes in the gambling industry, something which stakeholders and those in the industry have reacted extremely strongly to.
Support from Some Sectors
UK national newspapers reported on Friday, October 11th, that the Labour government is considering raising £3 billion in taxes from gambling firms. Two think tanks and one of the party's top five private donors propose to double some of the taxes applied to gambling operators.
A report from one of the think tanks, the Institute for Public Policy Research (IPPR), indicates the government could find over £3 billion every year between now and 2030.
Derek Webb, a former poker player now invested in stricter gambling industry regulation, backed the move to increase remote gambling duty from 21% to 50% and the general duty tax on bookmakers from 15% to 30%. Webb has donated £1.3 million since the beginning of 2023, making him one of the five biggest donors to the Labour Party in that time.
Tax Raid
In the UK, there are seven distinct forms of betting and gaming duty, including those applicable to the National Lottery. The rates vary depending on the type of activity involved. Under the proposal, games perceived to cause less harm, such as lottery and bingo games, would keep current duties. Instead, the government would double the taxes on higher-harm games, such as slots and other casino games.
The news was reported with inflammatory language and received equally explosive responses. The Guardian newspaper and Regulus Partners described the move as a tax raid. While the IPRR describes it as the “best application of the ‘polluter pays’ principle”. They hope it will incentivise companies to focus on providing lower-harm services.
However, many in the industry feel that the rumoured changes will not come to pass, and that it would be ‘economically illiterate’ for the government to actively consider such options. More reasoned responses came from some areas, with Alun Bowden, Senior Vice-President for Strategic Insight at Eilers & Krejcik Gaming, assessed the tax increase as “pretty unlikely”.
The economic markets also reacted strongly, with share prices at UK gambling giants Flutter, Entain, Evoke and Rank Group dropping. Entain was down around 15%, Evoke went down 16%, Flutter ended the day 9% down, and the Rank Group opened down 7%.
Ultimately, the industry, like many others, will need to wait with baited breath for the announcement of the budget from Rachel Reeves on October 30th.
