This budget build-up has been filled with a myriad of twists and turns, only escalated by the unusually late date of late November – meaning the early winter months were met with speculation and conjecture around the contents of the red briefcase.
Additionally, unlike the regular budget run-in, this time it has felt almost right up until the ink has dried, there has been room for adjustments in the fate of various industries.
That being said, for iGaming, the wins have been scarce and two key news narratives this week have almost certainly sealed taxation despair for online gambling operators.
Income tax turmoil
Surprisingly, key decisions appeared yet to be signed and delivered, with a potential manifesto breach dominating the headlines in the penultimate week before the budget.
Huge furore and calls for the Chancellor to resign saw plans for the headline rate of income tax to be increased quickly abandoned by Reeves.
The touted income tax rise, originally leaked to the Financial Times, caused huge political backlash and may well have caused a headache in number 11. The Treasury is caught between a rock of political and public scrutiny and a hard place of how to fill a void that would have been tackled by the controversial rise.
Given how the narrative and the PR battle has gone for the industry so far, any void indicates bad news, as gambling immediately falls into the firing line for tax hikes.
Intensifying the hammer
A rather humbling backtrack for Reeves meant any softening of the taxation hammer poised to fall on the gambling industry would have been intensified as a new gap in the budget emerged.
Such a significant shift in budget strategy so late in the day is quite unconventional and also may have provided a glimmer of hope that the lady in number 11 was potentially for turning, even if just a little.
Remember, she had shown some leverage to the horse racing sector when, after vehement protests, fuelled by the efforts of the British Horse Racing Authority, Reeves came down on her original plans to spike tax on racing.
The Telegraph cited anonymous sources, which essentially claimed victory for horse racing and secured the sport some exclusion from the tax pain set to be wielded upon the wider gambling industry.
Early concerns from the betting industry were that the General Betting Duty and the Pool Betting Duty – both currently at 15% – would be merged with the Remote Gaming Duty and go up to 21% as a result.
Racing somewhat separated itself from the wider betting industry in terms of lobbying, and whilst the move ruffled the feathers of the BGC, it paid off for racing.
The sport also had the backing of Reform UK, and as the hardline immigration policy of the Home Secretary highlighted, Labour is fearful of an exodus of its red wall support drifting to the right of British politics.
But as with most developments in Westminster, the narrative is truly everything and a concerning picture was painted in Parliament this week as Liberal Democrat Leader scolded Flutter’s to move Sky Bet from the UK to Malta.
As the best efforts of the industry had been put forward over a prolonged period to portray betting as a fun pastime and a much safer alternative to a black market, which would thrive amidst tax hikes, it was once again under the mainstream microscope for the ‘dark arts of tax evasion’.
No blame sits with Flutter here — the writing was already on the wall. But Reeves’ move to push the regulated gambling sector beyond its taxation tipping point next week just became far easier to execute, and far easier for the mainstream public to swallow.
