Problem gambling support and treatment services are at risk as a result of the tax increases on the UK gambling industry, as funds for the statutory levy dwindle.
This was the warning of Dan Waugh, Partner at Regulus Partners, who appeared on iGaming Daily following the UK government’s decision to ignore stark warnings from across the industry and increase remote gaming duty from 21% to 40% in April next year.
Alongside a new 25% general betting duty rate for remote betting being introduced from April 2027 (excluding self-service betting terminals, spread betting, pool bets and horse racing), the knock-on impact from these hikes could be that players are less protected and supported.
While the main potential causality of the increase, labelled by operators and the Office for Budget Responsibility themselves, has been more players wagering on the black market, one thing that has barely been mentioned has been how the tax rises will impact statutory levy support, which funds problem gambling prevention and treatment services.
Waugh dived into this topic on iGaming Daily, noting that treatment and prevention services could be affected since levy funding is largely driven by contributions from online gambling operators and ultimately, the levy itself could collapse.
“Since April, funding for gambling disorder treatment services in this country has been pegged to spending in the licensed market via the statutory levy,” noted Waugh.
“If spending in the licensed market is reduced as a result of these tax changes, funding for treatment services in this country will fall. That’s a straight mathematical equation, that’s not our opinion, that is just what will happen.
“It’s worth reflecting that if you look at projected funding from the statutory levy to fund treatment services and other harm prevention measures, about 80% comes from online gaming and betting, it’s more than 50% from online gaming.
“If there is significant displacement from the licensed market into the black market in online casino, the statutory levy that was put in place in April to fund treatment services and harm prevention will collapse.”
Waugh added that independent charities who provide gambling harm support and treatment could be hit hard as a result of the tax increase, impacting players that need help.
He stated: “The commissioners under the levy generally are self-interested. So OHID and NHS both have their own services. They will likely prioritise them, which means that charities will be at the back of the queue.
“Because of this ideological purity that some of the anti-gambling campaigners and public health insists on, these charities have been told you cannot seek money from the gambling industry, which has funded you for the past 25 years or more, you’re not allowed to. Charities will be put in a real pinch.
“Some of these think tank proposals incoherently said if you raise taxes, that increases player safety. One, I think that’s entirely speculative, but two, the chances are it will push people to the black market.
“If you’re doing that, at the same time as you’re pulling the rug out from underneath the treatment services that look after people who get into difficulties with their gambling, the net consequence of that could be absolutely devastating.
“There could be massive harm arising from these really very poorly thought-through proposals.”
To listen to the full iGaming Daily episode – Ep 657: What Next For UK Gambling After Online Tax Hikes Confirmed In Budget? – click here.
