Chancellor’s Autumn Statement reveals potential online betting tax hike

Jeremy Hunt says the UK government will consult shortly on proposals to streamline remote gambling tax rates  

The UK government has confirmed that it is exploring the possibility of introducing a uniform GGR tax structure on remote gambling.  

Buried in Chancellor of the Exchequer Jeremy Hunt’s 120-page Autumn Statement, point 5.86 states that the government will shortly consult on proposals to bring remote gambling “into a single tax, rather than taxing it through a three-tax structure”. 

As things stand, there are three different taxation rates on gambling: remote gaming duty, general betting duty and pool betting duty. 

The first of these, remote gambling duty, was updated in April 2019 and meant that the tax on games of chance was raised from 15% to 21% on operators’ GGR generated. 

General betting duty covers general or pool bets on horse or dog racing, either in land-based venues or online, spread bets and exchange bets, all of which are charged at a rate of 15% of GGR. 

Lastly, pool betting duty, which is based on bookmakers’ profits from bets that are not at fixed odds and are not on horse or dog racing, is also set at 15%.

Lifting general betting and pool betting taxes to 21% of GGR – bringing it into line with online gaming duty – is bound to be unpopular among UK licensed remote operators but is a move that industry observers have previously suggested could happen as a means of raising easy additional tax for state coffers.  

A hike would mean the UK’s GGR rate for all forms of online gambling would be slightly above that of Spain (20%), yet still comfortably below Denmark which raised its duty on GGR from 20% to 28% in 2021. 

Meanwhile, the Swedish government is currently mulling proposals to raise the country’s taxes on online operators’ GGR from 18% to 22% from July 2024

The UK government has said it will consult on this streamlining of the remote gambling taxation system shortly and will probably form part of the next round of consultations hinted at by Gambling Minister Stuart Andrew and Gambling Commission CEO Andrew Rhodes yesterday, 21 November.

Speaking at the British Amusement Catering Trade Association (BACTA) convention, Andrew revealed that the government are currently going through the initial round of consultation responses and will issue its response early next year. 

Rhodes confirmed that throughout 2024 there will be further consultations with this review of the taxation system, now likely to form part of this.

The UK’s Office for Budget Responsibility estimates that betting and gaming duties across all forms of gambling – including offline – will raised £3.5bn in 2023-24.

Photo credit: UK Parliament website:https://creativecommons.org/licenses/by/3.0/

 

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