Stakeholders involved in the gambling industry in the UK have received advice to engage in a government consultation regarding the reform of remote gambling tax. This is to prevent the sector from becoming economically unsustainable, as highlighted by UK partner Zoe Feller from the law firm Bird & Bird during its recent global gambling webinar.
Back in April, the UK government initiated an industry consultation with the proposal to streamline the current three-tier tax rate system for remote gambling into a single consolidated rate.
At present, remote activities are subjected to taxation through Remote Gaming Duty (RGD) at 21% of operator profit, General Betting Duty (GBD) at 15% of profit, and Pool Betting Duty (PBD) at 15% of net stake receipts.
There have been concerns raised within the industry regarding the potential implications of these changes, fearing that all sectors may face a 21% duty.
Feller emphasized to the listeners that providing more information and data to the government’s tax consultation would enhance the likelihood of establishing a new tax framework that is beneficial to the sector.
“The concern is that all single tax rates will be set at 21%,” Feller stated. “Considering this is a duty, it could render the entire sector economically unfeasible.”
Consultation on Remote Betting & Gaming Duty
Feller further mentioned that any concerns expressed during the consultation regarding the reform will ideally be taken into consideration if the government proceeds with its plan for a unified remote betting duty.
“I strongly urge individuals, either through representative organizations or independently, to respond to the questions in the consultation and provide the government with more information, as the more data collected, the more likely it is to result in a functional and effective tax system,” Feller recommended.
Feller also highlighted industry apprehensions about the infrastructure needed to manage the new Remote Betting & Gaming Duty, cautioning that a new system could entail additional administrative tasks for operators.
It was also pointed out that the government’s proposal does not encompass all aspects that could be subject to taxation within the industry, such as prize draws, a rapidly expanding sector that currently lacks the same level of regulatory oversight as traditional lotteries.
“The consultation addresses the tax treatment of prizes; however, it overlooks the tax treatment of prize draws, which is surprising given the emphasis last year on prize draws in the gambling white paper,” Feller remarked.
The consultation process for the Remote Betting & Gaming Duty is anticipated to last between eight to ten weeks, with submissions closing on 21 July. The UK government is set to unveil its finalized plans in the autumn budget of 2025.
Industry Stakeholders Already Doubtful of Tax Duty Reform
The UK gambling industry has already voiced several concerns that the government’s actions could create a challenging environment for operators to navigate.
Feller from Bird & Bird pointed out that while the government views the new consolidated Remote Betting & Gaming Duty as a simplification of the existing system, many industry members do not share the same perspective.
Grainne Hurst, CEO of the Betting and Gaming Council, previously cautioned that the proposed tax reform might lead to an overall increase in taxes. In April, Hurst stated that it could be a counterproductive decision by the government that undermines its growth strategy.
“Additional tax burdens on our members shortly after a white paper that cost the sector over a billion pounds in lost revenue will not generate more revenue for the treasury,” Hurst remarked in a statement to iGB.
There is a broader concern that a tax hike could inadvertently fuel the expansion of the black market.
Gambling consultant Steve Donoughue informed iGB that future tax rates are influenced by black markets as gamblers shift from legal operators to illicit competitors offering more attractive deals.
