Take part in remote gambling tax reform or face ‘unviable’ sector

UK Gambling Industry Stakeholders Urged to Participate in Remote Gambling Tax Consultation to Prevent Economic Viability Crisis

In a recent global gambling webinar, Zoe Feller, a partner at the law firm Bird & Bird, emphasized the critical need for UK gambling stakeholders to engage in the government’s consultation on remote gambling tax reform. This initiative is geared towards mitigating the risk of creating an “economically unviable” sector, amid concerns of escalating tax burdens.

In April, the UK government initiated an industry-wide consultation to revamp the existing tiered tax system for remote gambling. Currently, the taxation framework consists of three distinct levies: the Remote Gaming Duty (RGD) at 21% of operator profits, the General Betting Duty (GBD) at 15% of profits, and the Pool Betting Duty (PBD) at 15% of net stake receipts.

The sector has voiced apprehensions that these reforms may inadvertently unify all tax obligations under a singular rate of 21%, a move that could have dire consequences. “The more comprehensive the data and feedback provided to government officials, the more likely we are to establish a tax construct that accommodates industry needs,” Feller advised.

“There is a palpable fear that the simplification may lead to a uniform duty at 21%, or even a more detrimental tax rate,” Feller cautioned, stressing that such developments could jeopardize the sustainability of the entire sector.

Remote Betting & Gaming Duty Consultation: Stakeholder Engagement Essential

Feller also pointed out that any apprehensions articulated during the consultation will hopefully be considered in the design of a consolidated Remote Betting Duty. “I strongly encourage stakeholders—whether through representative organizations or as individual entities—to contribute to this consultation. The government’s decision-making is often better informed by robust data,” she added.

Additionally, concerns were raised regarding the infrastructure implications associated with the new Remote Betting & Gaming Duty, as it may entail increased administrative responsibilities for operators. The current proposal notably overlooks significant aspects of tax liability within the sector, particularly relating to prize draws—a burgeoning vertical that currently faces less regulatory oversight compared to traditional lottery frameworks.

“What is markedly absent from the consultation document is guidance on the taxation of prize draws, especially given last year’s extensive discussions surrounding this topic in the gambling white paper,” Feller remarked.

The consultation period for the Remote Betting & Gaming Duty is anticipated to span the next eight to ten weeks, with submissions due by July 21. The UK government is expected to unveil its finalized strategy in its upcoming 2025 autumn budget.

Industry Stakeholders Skeptical of Tax Duty Reform

The UK gambling industry has voiced significant concerns regarding the potential implications of the proposed tax reforms. Feller noted that the government perceives the new consolidated Remote Betting & Gaming Duty as a streamlined approach relative to existing regulations; however, many industry players contend otherwise.

Grainne Hurst, CEO of the Betting and Gaming Council, previously cautioned that this reform could lead to overall increased taxation. As she pointed out in April, such moves might paradoxically negate the government’s growth strategy, potentially backfiring in terms of revenue generation. “Any further tax increases for our members, especially following a white paper that resulted in over a billion pounds in lost revenue, will not yield additional funds for the treasury,” Hurst stated.

There exists a broader fear that elevating tax rates may inadvertently escalate the allure of the black market. Gambling consultant Steve Donoughue articulated this concern, warning that illegal operations could undermine legal operators by offering more attractive, albeit illicit, incentives.

In conclusion, the future of the UK gambling landscape hinges on active participation in the ongoing tax consultation. Stakeholders must unite to present a compelling case that preserves the industry’s viability while ensuring compliance with evolving regulatory standards.