The UK gambling industry could be facing a significant tax hike, as new Chancellor Rachel Reeves searches for revenue raising measures ahead of a tough first Autumn Budget.
The Guardian reports that one of the ideas being given serious consideration by the Treasury are major changes to the UK’s complex array of gambling taxes. Unlike many of the tax ideas that have been floated by government sources in recent weeks, this one has received little pushback from Whitehall officials, according to the newspaper.
Plans for the increase reportedly stem from two influential think tanks, which according to the Guardian are also backed by one of the party’s most significant donors.
A central theme of the Labour government’s initial 100 days in charge has been their commitment to plugging a £22bn gap that they claimed was left by the previous tenure.
Online casino games are thought to be at the center of potential tax hikes, as part of a campaign pushed by multimillionaire Labour donor, Derek Webb.
Webb, who has elevated his stature as a Labour donor in recent years, was also key for the campaign to restrict maximum stakes on Fixed Odds Betting Terminals, a regulation that had a major impact on the retail gaming sector.
The Institute for Public Policy Research (IPPR), which put forward the proposals, said as much as £2.9bn could be raised now, a figure growing to £3.4bn by 2030 through the increasing of remote gaming duty to 50%, more than double the 21% it currently sits at.
Additionally, another think tank backed by Webb, the Social Market Foundation, is reportedly looking at a proposal that would have a smaller impact on the industry, but still strengthen government finances.
Despite it being seen as a diluted increase in taxes, the plans would still be likely to double taxes paid by gambling companies – another move that would likely lead to backlash from the sector.
UK operators will anxiously await the Labour government’s first budget on 30 October, after a Guardian report of the potential plans for a tax increase caused widespread declines across operator shareholder prices on Monday morning.
It comes as the government underlines ambitions to boost the UK’s status as a hub for business – hosting the International Investment Summit in London amidst a pledge from the Prime Minister to remove red tape and regulatory hold ups when it comes to business.
According to the report by the Guardian, plans are far from cemented. However, they are being seriously explored as the government hopes to raise funds to navigate a tricky economic period.
The Betting and Gaming Council has previously warned of the impact a significant increase on taxes could have on the sector and player safety, calling on the government to take a balanced response when it comes to regulation.
Just last month, the BGC commissioned a report published by consulting firm Frontier Economics titled ‘The size and economic costs of black market gambling in Great Britain’.
The BGC detailed that £2.7bn is being wagered online on illegal sites, while up to a further £1.6bn may be being staked in person at illegal gambling dens.
The £2.7bn estimate for online gambling is divided as follows: £262m is attributed to players who exclusively use black market online operators, £433m comes from those who only gamble via social media or messaging platforms such as WhatsApp, while the remaining £2bn is contributed by players who split their gambling activities between black market and UK-regulated operators.
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