Politicians in Northern Ireland have penned an open letter demanding that Chancellor Rachel Reeves reject the UK government’s gambling tax harmonisation plans.
The Northern Ireland Assembly’s All-Party Group on Reducing Harm Related to Gambling (APG) have instead echoed widely-backed calls for a greater tax rate for remote gambling in recognition of the greater harm caused by iGaming products compared to other forms of gambling.
Currently, the treasury is considering shifting to a single remote betting and gaming duty (RGBD), which would likely bring tax on all forms of gambling in line with the current remote gaming duty rate of 21%.
However, the APG’s open letter, penned by Chair Philip McGuigan MLA, argues the proposals are inconsistent with Labour’s pledge to reduce gambling-related harm.
It states: “The evidence clearly shows that remote gaming products, such as online slots and casino games, are far more harmful than remote betting. The British government should not be seeking to harmonise the rate at which these types of remote gambling are taxed.
“It should instead use the upcoming budget to increase the tax rates on remote gambling to offset the societal costs of the harms associated with it, which are estimated to cost the exchequer in excess of £1bn annually.”
Like Labour backbenchers and the former PM Gordon Brown before them, politicians in Northern Ireland believe that the remote gambling industry remains “undertaxed” compared to other countries.
All three groups have backed proposals from the Institute for Public Policy Research for a 50% tax rate, which the think tank claims would raise an additional £1.88bn in revenue for the government.
McGuigan added: “Remote gambling, and in particular online gaming and slots, is causing untold harm to individuals, families and communities here. It is unacceptable that these highly addictive products could be taxed at the same rate as less harmful gambling activities, like betting on horse racing.”
However, notable figures across the industry have cautioned against the “unintended consequences” of a tax raid in the 26 November budget. Both evoke and Betfred have threatened retail closures if Reeves follows through with excessive tax rises.
‘Boldface claim’
Reeves has been urged not to cave in to such “industry scaremongering” by the UK Parliament’s Treasury Committee in a new report published today (7 November).
Made up of politicians from Labour, Conservatives and Liberal Democrats, the committee heard testimony from several witnesses, including Paddy Power Co-founder Stuart Kenny, who, since leaving the operator, has become a vocal critic of the industry, and the CEO of the Betting and Gaming Council (BGC), Grainne Hurst.
The committee criticised the “boldface claim” made by Hurst, who, despite sustained questioning, refused to accept that any gambling product forms part of social harm.
The BGC also defended claims that a higher taxation for remote gaming is required due to UK online gambling operators placing themselves in offshore jurisdictions, such as Gibraltar, where corporation tax is lower.
“We have lots of businesses headquartered in the UK, paying UK corporation tax, but with operations in a number of other jurisdictions, like Gibraltar, and paying local corporation tax in those places,” Stephen Hodgson, Chair of the Tax Committee for the BGC, told the committee.
Despite the BGC’s efforts, the Treasury Committee also concluded that the government should “sharpen the differentiation” between physical and remote gaming.
“Different forms of gambling cause varying levels of harm to individuals, families and society. We are not convinced that current Treasury policy on the taxation of gambling captures the varying extent of those harms,” the report stated.
“The Treasury must ensure that remote gaming duty and machine gaming duty (standard and higher rates) are always set at a higher rate than gaming duty.
Given the mounting pressure on Reeves to steer a cash-strapped economy, and her own admission that gambling operators must “pay their fair share”, it now appears an inevitability that the gambling industry will be left counting the cost on 26 November.
