New Remote Betting Tax Could Put 40,000 Jobs at Risk, EY Report Claims

Ernst & Young (EY) has forecast a potential 40,000 jobs could be at risk if a new 50% remote betting tax rate is introduced in the UK, with more than £1 billion in annual revenue being lost to the black market.

On November 26, Chancellor Rachel Reeves is expected to announce the new remote betting and gaming duty (RBGD) in the Autumn Budget. The RBGD would be a single remote betting tax, replacing the current system of three separate remote betting taxes.

Various estimates have been made as to what the new rate will be, and while most within the industry do not expect a rate above 25%, 101 Labour MPs have called for a rate of 50%. The new tax would come into effect in October 2027 at the earliest.

In the current system, remote gaming duty (RGD) is set at 21% of gross profit on games of chance. There is also pool betting duty of 15% of gross profit on bets not at fixed odds apart from those on horse and dog racing, and general betting duty (GBD) at 15% of gross profit on sports bets.

EY forecasts

EY’s report, which was commissioned by the Betting and Gaming Council (BGC), focused on a number of different scenarios, with one looking at an aligned rate of 21%, two forecasting results from other proposals and one being EY’s own outlook.

One of these models was based on the Institute of Public Policy Research’s recommendation of a 50% RGD, 50% machine gaming duty (machine gaming duty is not included in the current RBGD proposal), 25% RGD and a horseracing tax of 15%.

In this model, 14,100 direct jobs could be impacted, as well as another 26,000 indirect jobs. This would also lead to £8.4 billion in betting stakes moving to the black market, meaning £290m in tax revenue would be lost, and excise revenue of £1.06 billion for operators would be gone.

SMF proposal

Another model was based on the Social Market Foundation’s proposal of a 50% RGD, 25% GBD, 20% MGD and horseracing rax of 5%. In this model, more than 30,000 jobs could be impacted, with £8.1 billion in stakes moving to the black market, which would lead to £470 million in lost revenue for operators and £250m in lost duty revenue.

Aligned tax model

In the aligned 21% tax rate model, 4,700 jobs could be impacted, and £1.2 billion in stakes could move to the black market, costing operators £180 million and the government £30 million in duty.

EY’s ready reckoner

EY’s own model was based on a five percentage point increase in GBD, RGD and MGD. In this scenario, EY forecast 4,100 jobs could be impacted, and £430 million in lost revenue for operators. Grainne Hurst, Chief Executive of the BGC, said: “It is now clear these further tax rises are a direct threat to British jobs and economic growth.”

Racing industry amps up pressure

Meanwhile, a total of 363 participants from the horseracing industry have sent an open letter to Reeves, addressing what the participants call “irreversible consequences” the RBGD could bring to British racing. The signatories include racehorse owners, trainers, jockeys, breeders, administrators and racehorse executives.

In September, the British Horseracing Authority (BHA) suspended racing fixtures in protest against the possible RBGD. The BHA has estimated the sport could lose £66 million per year as a result of the tax.