Sir Keir Starmer’s Treasury reshuffle could have major implications for the gambling sector as stakeholders await the upcoming budget with trepidation.
Interestingly, there is a direct link between his new PR Chief, Tim Allan and the gambling industry, with Allan previously having led communications agency Portland, which had William Hill amongst one of its leading clients.
Prior to that Allan had a diverse range of communication jobs, including working for Qatar and the Russian government.
The Chief Secretary to the Treasury, Darren Jones, has moved to a more senior role – importantly reporting directly to Starmer, which is perhaps an indication that the Prime Minister is looking to gain a tighter grip on the budget.
James Murray steps in for Jones in his new role, working closely alongside Rachel Reeves, Murray previously oversaw the reform of the HMRC – bringing it into a more digital age. Perhaps pertinent, he has consistently been an advocate of increases to corporation tax as well.
One appointment that could indicate tax rises are on the horizon is the decision to promote Dan Tomlinson to the role of Exchequer Secretary.
An appointment that not only shows faith in the new 2024 imports to Parliament, but could also further strengthen the narrative that tax hikes are looming in the upcoming budget.
Tomlinson had a fairly long history at the Resolution Foundation, during which time he played a role in creating the Ending Stagnation Report, which many believe is a key guidance for government economic policy today.
Central to the report is the necessity for tax reform as opposed to tax hikes, especially at a time when tax cuts have been promised. This could raise some alarms for the gambling industry which is looking at the prospect of a new tax framework.
The government is seeking opinions from stakeholders on a proposal to merge the three existing tax categories – Remote Gaming Duty, General Betting Duty and Pool Betting Duty – into a single standard known as the Remote Betting and Gaming Duty (RBGD).This is in response to the rise of the remote gambling industry as the dominant form of gambling participation, having generated £6.9bn in gross gambling yield (GGY) according to the latest UK Gambling Commission estimates while enjoying 44% market share of the wider betting and gaming market.
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.
Murray previously issued comments on this as he stated: “The tax system needs to keep pace with the developments and innovation that have seen the UK-facing remote gambling sector change significantly in recent years. The three-tax system needs to adapt to reflect the dynamic and expanding nature of the sector.
“A single duty will provide tax certainty and increase simplification for remote gambling.”
Grainne Hurst, CEO of the BGC, issued a scathing response to these proposals, however, emphasising that ‘raising taxes further now on regulated betting and gaming through a new single tax would be ‘utterly self-defeating’.
She added: “BGC members contribute £6.8bn to the economy, generate £4bn in tax while supporting 109,000 jobs, but this flawed approach can only lead to a spiral of decline. The government must listen to business and sport and not drive growth, investment and jobs out of one of the UK’s few global business success stories.”
iGaming Expert Insight: The government is clearly leaning one way when it comes to the country’s economy – however, with the black market looming, few industries are walking as much of a tightrope as regulated gambling. The latest set of appointments provide the most pertinent clues when it comes to future taxation strategy.
