The Betting and Gaming Council (BGC) believes any gambling tax rise in the UK would have “catastrophic” consequences, driving customers to the black market and putting thousands of jobs at risk.
The statement from the standards body follows a YouGov poll, which revealed that 28% of regular punters would seek out illegal operators if a tax increase was brought in that forced licensed operators to remove offers and promotions.
According to the poll, 14% of regular punters already use a black market site to place a bet, while 29% would not be confident in spotting the difference between a black market site and a regulated operator.
“Punters are clear, get the balance on tax and regulation wrong and you hand a competitive advantage to the black market where operators pay no tax, contribute nothing to British sport, and offer no safer gambling protections,” commented Grainne Hurst, CEO of Betting and Gaming Council.
Tax rise consultation
A UK Government consultation on the ‘Tax Treatment of Remote Gambling’ closed this week (21 July), which asked for opinions on a proposed new single remote gambling duty, removing the requirement for online operators to comply with up to three separate taxes.
Remote Gaming Duty, General Betting Duty and Pool Betting Duty would be merged into a single standard known as the Remote Betting and Gaming Duty (RBGD).
The reasons behind the merger include the rise of online gambling in comparison to land-based gambling, as well as providing a simpler, streamlined system.
The current structure taxes Remote Gaming Duty (covering online slots, games, poker and bingo) at 21% of gross profits, charged on a place of consumption (POC) basis.
A three-tier charge is applied for General Betting Duty: 15% for fixed-odds bets, 10% for sports spread bets and 3% for financial spread bets. Meanwhile, Pool Betting is taxed at 15% of gross profits, a charge solely applied to sports pools, as horse racing and greyhound pools charges are excluded.
Under the new system, a single tax rate using the POC principle would be applied, bringing all charges under a unified format to simplify Remote Gambling tax duties, but resulting in a tax increase for some companies.
Up to £335m in lost taxes
Last September, a Frontier Economics report, commissioned by the BGC, stated that 1.5 million people in the UK gamble up to £4.3bn on the black market each year, depriving the Treasury of up to £335m over a five-year Parliament.
Hurst noted that the black market is actively targeting UK customers and any gambling tax rise would make illegal offers more attractive and put more players at risk.
The BGC CEO said: “Any tax hike would be catastrophic. This would put thousands of jobs and millions in investment at risk, while threatening the future of all sports that rely on regulated betting for funding – from racing and football to rugby league, darts and snooker.”
“Balanced regulations and a stable tax regime are the best defence against the black market. This is a wake-up call for the Government, punters have been loud and clear, hit them with further taxes and they will walk away from the legal, regulated market, straight to the black market, triggering a spiral of decline which raises less tax, and undermines player protections.”
A recurring message
This isn’t the only time the BGC has recently called out the UK Government to reconsider a potential gambling tax hike.
Last month, the standards body stated that the Government’s growth plan needs to back all industries, including betting and iGaming, warning that the sector needs to avoid “self-defeating tax rises” for gambling that could have a big impact on employment.
Hurst said: “BGC members welcomed the recent growth figures. We want to support the Chancellor and play our part in the Government’s growth agenda. But if Ministers really want to see growth, they have to will the means. That does mean backing every industry and every sector – including the world-leading betting and gaming industry.
“If we want firms to keep investing and employing people here in the UK, we desperately need stability – and not more self-defeating tax rises that can only threaten jobs and growth.”
