Date: 24.11.2023

by Antoni Majewski

UK Government Considers Unified Betting Duty, Freezes Gaming Duty Bands

The UK government, in its Autumn Statement, has indicated a possible shift in betting duties, aiming to simplify the taxation structure for remote gambling.

The proposed consultation suggests a unified tax system, potentially aligning Pool Betting Duty and General Betting Duty with the higher Remote Gaming Duty rate.

Current Tax Structure and Proposed Changes

Currently, bookmakers are subject to a 15% Pool Betting Duty on non-fixed odds bets and a similar 15% General Betting Duty on specific types of bets like pool bets on dog or horse racing. However, remote betting attracts a higher tax rate of 21% under the Remote Gaming Duty. The government’s proposal to bring remote gambling into a single tax structure raises the possibility of a unified 21% rate, though this has not been explicitly clarified.

The proposed changes could benefit the land-based and retail gambling sector, as it is not included in the consultation. This sector might find itself in a relatively advantageous position compared to its remote counterparts if the higher tax rate is implemented.

Gaming Duty GGY Band Freeze

The government also announced a freeze on gross gaming yield (GGY) bandings for Gaming Duty from April 2024 until March 2025. This duty, which taxes casino gaming profits, will remain at its current rates, ranging from 15% to 50% depending on the GGY. The freeze implies an effective tax increase for casinos, as the bands will not adjust for inflation.

The Betting and Gaming Council (BGC) has criticized the decision to freeze Gaming Duty bands. BGC CEO Michael Dugher expressed disappointment, suggesting that adjusting the bands could have boosted the land-based casino sector. He labeled the freeze as a “stealth tax” that could hinder the sector’s recovery and growth. The BGC estimates that this freeze could cost casinos £25 million over the next five years.

Statutory Levy on Online Gambling Operators

Another significant development is the consultation on the introduction of a statutory levy, requiring online gambling operators to pay a 1% tax on revenue. This levy is intended to fund research, education, and treatment initiatives for gambling-related issues, replacing the current system of voluntary contributions.

Our Comment on The Article

The UK government’s consideration of a unified betting duty and the freezing of Gaming Duty bands reflect ongoing efforts to streamline gambling taxation and address the evolving landscape of the industry. While the potential shift to a higher unified tax rate for remote gambling could level the playing field, it may also pose challenges for online operators. The freeze on Gaming Duty bands, criticized by industry stakeholders, points to the complex balancing act between government revenue needs and supporting the gambling sector’s growth. These developments, coupled with the proposed statutory levy, indicate a broader regulatory push to ensure responsible gambling practices and provide necessary support for gambling-related issues.