UK Gambling Levy Sparks Debate Amid Industry Concerns
The UK government’s new gambling levy has sparked widespread debate as details of its rates and impact emerge. While intended to tackle gambling-related harms, the levy has raised concerns about fairness, its effect on operators, and the risk of pushing players toward unregulated markets.
Different Levy Rates Across Sectors
The new levy rates vary across industry segments, reflecting the government’s aim to align contributions with business models and operating costs. Online and remote software licensees will pay the highest rate at 1.1%, up from the previously proposed 1%. Land-based casinos and betting venues face an increase to 0.5%, while arcades and bingo halls will see rates double to 0.2%. Conversely, machine operators and pool betting businesses will benefit from a reduction to 0.1%.
Criticism has emerged over the decision not to exempt smaller operators, as initially proposed for businesses with gross gambling yields (GGY) under £500,000. Instead, a minimal contribution threshold of £10 has been introduced, meaning only the smallest obligations will be excluded.
Impact on Charities and Lotteries
Society lotteries, including the People’s Postcode Lottery, are subject to the levy at a lower rate of 0.1%. However, these organisations argue that the levy diverts critical funds from charitable causes. Critics have highlighted that significant amounts of money intended for charitable initiatives will instead support gambling harm mitigation efforts, unrelated to lottery operations.
This has led to dissatisfaction among lottery operators, who claim the policy undermines the “polluter pays” principle by penalising entities with minimal contribution to gambling harm.
Concerns Over Black Market Expansion
The levy coincides with broader regulatory changes that experts warn could unintentionally fuel the growth of the unregulated gambling market. Analysts predict that the black market could grow by up to 32% in 2024, with net gaming revenue potentially reaching £1.5 billion. This would make the UK’s unregulated market one of the largest in Europe.
Key factors driving this growth include high-value players seeking to avoid stringent affordability checks and financial regulations. These players are increasingly turning to offshore operators, private bookmakers using encrypted messaging apps, and cryptocurrency-based platforms. This migration is seen as a reaction to the compliance measures introduced under the revised Gambling Act.
Industry Adaptation and Broader Implications
The mandatory levy is expected to fund treatment, prevention, and research into gambling-related harms, with significant contributions directed toward NHS initiatives. However, industry stakeholders have expressed concerns that the financial burden could disproportionately affect smaller operators and result in unintended consequences, such as reduced funding for charitable causes and increased consumer migration to unregulated markets.
As the implementation of the levy progresses, industry experts stress the need for targeted strategies to address the rise of the black market and ensure that legitimate operators remain viable while achieving the levy’s core objective of reducing gambling harm.
