New Tax Debate Continues With Treasury and Betting & Gaming Council

The debate about the proposed remote betting and gaming duty (RBGD) has intensified, with the Treasury Committee and the CEO of the Betting and Gaming Council (BGC) sending out conflicting statements further outlining the divide between the two sides.

While the Treasury Committee has called for the government to not cave in to industry scaremongering about the potential consequences of the RBGD being set at a higher rate, the BGC continues to argue this will lead to many jobs being lost and players being pushed to the black market.

What’s the issue?

On November 26, Chancellor Rachel Reeves is expected to announce a new remote betting and gaming duty (RBGD) in the Autumn Budget. The RBGD will replace the current system of a single remote betting tax. It is currently unclear what the new tax rate will be, and while industry insiders have expected a rate of 21% to 25% of gross profit, a rate as high as 50% has been rumoured.

In September, a group of 101 Labour MPs sent a letter to Reeves calling for rates proposed by the Institute for Public Policy Research. This would mean a 50% tax for remote gambling duty and machine games duty, as well as a 30% rate for general betting duty on sports betting.

Treasury Committee calls for action

The Treasury Committee has published a report encouraging the government to be bold in the face of the pressure being applied by the industry. The report referenced the industry’s claim that higher tax rates will lead to growth in the black market, but cited a recent paper in the Harm Reduction Journal arguing that “narratives advancing a threat of black-market provision of gambling [are] a form of ‘regulatory resistance’.”

The Treasury Committee also referenced a 2023 study from the Danish Gambling Authority, arguing there is not a correlation between higher remote gaming duties and the black market taking up larger shares of those markets; although there were examples that pointed in both directions.

In Great Britain, the black market was believed to account for about 3% of the market. In countries such as Portugal and Denmark, where the remote betting tax rates are 25% and 28% respectively, the black market’s share was closer to 10%. However, Czechia has a rate of 35% and a black market with an estimated share of less than 3%.

Dame Meg Hillier MP, Chair of the Treasury Committee, said: "We are urging the government not to cave in to industry scaremongering and to tax online betting games at a rate that reflects the level of harm they inflict.”

Case for the defence

In response to the Treasury Committee, the BGC, which represents approximately 90% of the UK’s licensed betting and gaming businesses, reiterated its points about the potential ramifications of a severe tax hike.

BGC CEO Grainne Hurst said: “Any increase in machine games duty would be devastating for land-based operators like casinos and betting shops. These are already highly-taxed, highly-regulated businesses that provide thousands of good jobs on high streets and in hospitality venues across the UK."

“The government must think very carefully before taking decisions that could undermine Britain’s much-loved leisure and entertainment sector and drive customers towards the unsafe, unregulated black market.”

Last month, the BGC published a report it commissioned Ernst & Young to produce, which forecast a potential 40,000 jobs could be at risk if a new 50% remote betting tax rate is introduced.

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