British gambling tax hike could push two thirds of players to black market, BGC warns
The industry body is lobbying against proposals to change the structure of British gambling tax.
UK.- The Betting and Gaming Council (BGC) is stepping up its lobbying against the UK government’s proposal to revamp British gambling tax.
Back in April, His Majesty’s Revenue and Customs (HMRC) opened a consultation on its proposal to combine three separate tax categories – Remote Gaming Duty, General Betting Duty, and Pool Betting Duty – into a new single category termed Remote Betting and Gaming Duty (RBGD).
The current Remote Gaming Duty, which covers online slots, poker, bingo and similar, is levied at 21 per cent of gross profits based on a place of consumption (POC) model. General Betting Duty varies depending on vertical: fixed-odds betting is taxed at 15 per cent, sports spread betting at 10 per cent, and financial spread betting at 3 per cent. Pool Betting Duty is charged at 15 per cent on gross profits, applicable to sports pools only (excluding horse and greyhound racing).
Under the HMRC’s new proposal, the combined RBGD would maintain the POC principle, which has been in place since 2014. This states that operators pay UK taxes if their customers are located in the UK, regardless of the operators’ own country of domicile.
The BGC has now reported the results of a YouGov survey that found that 65 per cent of gamblers believe a tax hike on sports betting like horseracing would “make customers turn to unregulated betting sites that don’t have to pay any tax at all.”
Participants were asked “imagine that betting on sports events like horseracing became more expensive because the government increased the amount of tax that betting companies have to pay. How likely or unlikely do you think it is, if at all, that this would make customers turn to unregulated betting sites that don’t have to pay any tax at all?”
Only 23 per cent said such a hike would be unlikely to have an impact on customers drifting to the black market. Another study commissioned by the BGC found that 1.5m Brits stake up to £4.3bn on the growing gambling black market annually.
BGC CEO Grainne Hurst said: “This shocking statistic proves what’s at stake if the Government forces through a self-defeating tax hike on ordinary punters. It’s clear it will not raise more tax, it simply risks forcing huge numbers of customers out of the regulated market, with its world leading standards on player safety, into the arms of the growing, illegal, unregulated and unsafe gambling black market online.
“Any tax rises would make a mockery of the Government’s growth strategy and be catastrophic for horseracing, which is already facing a bleak financial outlook. This is a wake up call for Government, punters have been loud and clear, hit them with further taxes and they will walk away from sports like racing, straight to the black market, triggering a spiral of decline.”
