UK Gambling Industry Must Amp up Messaging Ahead of Autumn Budget

The UK gambling industry continues to struggle with attacks from politicians calling for tax hikes, with next month’s Autumn Budget once again proving crucial, and industry bodies have a short amount of time to put up another defence.

In last year’s Autumn Budget, which was pushed back to late November, then Chancellor Rachel Reeves increased remote gaming duty, paid on online casino bets, from 21% of gross gambling yield (GGY) to 40%.

This change was implemented in April this year, and we have already begun to see the impact, with Bally’s Intralot reporting a £29.2 million hit to revenue in Q2 as a result of the tax, and other operators putting mitigations in place.

A further rise coming

In addition to the increased online casino tax, general betting duty, paid on online sports bets, will be raised from 15% of GGY to 25% from April 2027. In a sign of the importance of industries holding a positive relationship with the government, bets on horseracing have been made exempt from the increase and will remain at 15%. However, the horseracing industry is still likely to experience the knock-on effect for bookmakers.

Andy Burnham taking over as Prime Minister in July has not appeared to provide any respite for the industry. Burnham recently caused controversy by grouping betting shops with vaping shops as “dodgy businesses”.

In August, the government announced plans to revoke the “aim to permit” rule stipulated in the Gambling Act 2005, which would mean local councils would have greater power to prevent gambling venues from opening.

Currently, the default starting point in a license application would be for the license to be granted; a licensing authority would have to justify its reasons for rejecting a license application if it wished to do so.

The new legislation would essentially flip this over and require the applicant to prove its application is in line with licensing objectives.

MGD is next in the firing line

The latest item on the agenda will be machine games duty (MGD). Cross-party think tank the Social Markets Foundation (SMF) recently recommended MGD should go up to 40% of net takings.

The SMF wants a tax rate to encompass all Category B machines, arguing the government needs to raise revenue, and that more harmful types of gambling should lead to higher rates of tax.

To make matters worse for the gambling industry, former Prime Minister Gordon Brown suggested in August that increased MGD could help mitigate against the upcoming winter fuel crisis.

Brown told the BBC’s Today Show:

“I would support, for example, a machine gaming tax. Up to £500 million can be raised without affecting bingo halls or pubs, but these adult entertainment centres (AGCs), I would put a tax on that and I would use that money to pay for help in the crisis and a resilience fund for people who are facing difficulties with their fuel bills.”

BGC and others must step up

Industry trade body the Betting and Gaming Council (BGC), which has frequently released studies and statements to make arguments against tax increases, has not made a public statement arguing against Brown’s idea.

With Paddy Power this week becoming the latest operator to announce 100 shop closures, following similar announcements from William Hill owner Evoke as well as Betfred, it is an important time for the BGC and the operators themselves to send the message that redundancies will continue to become inevitabilities if the trend continues.