UK gambling tax plan just Trojan horse: Gambling Commission
If the UK Treasury's new tax plan for the gambling industry goes ahead, it will be another blow to horse racing. The Gambling Commission (BGC) warned of the scheme on Monday, describing it simply as a "Trojan horse".
Essentially, this is about the possibility of tax increases on all long distance bets. The UK government hinted at the change last week when it released its "Autumn Statement", one of two mini-budgets produced each year by the Treasury.
The Treasury has suggested that a flat tax on remote betting may be necessary. Currently, the Sports Betting Tax is 15% of winnings. Remote gaming tax is 21%.
The Remote Gambling Tax covers casino gambling offered via the internet, telephone, television and radio. However, BGC believes the government will use its powers to raise taxes on remote gambling to the same level.
"There is a real concern that any so-called simplification of the current tax structure is nothing more than a Trojan horse for further increases in corporate taxes," BGC chief executive Michael Dugher said.
Impact on horse racing
The scheme would be particularly damaging for the horseracing industry, which has seen declining participation and revenue. From 2007 to 2018, betting participation in events such as Royal Ascot and the Grand National dropped from 17% to 10%.
The introduction of affordability checks and a new mandatory responsible gambling tax has put pressure on operators and players. A further 6% tax increase could severely weaken horse racing, which relies almost entirely on tax revenue for its survival.
The problem is further exacerbated by a lack of cooperation between the Treasury and the gaming industry. There was no discussion of the proposed tax changes ahead of the Autumn Statement, nor any input from the Department for Culture, Media and Sport (DCMS), which oversees the gaming ecosystem.
Earlier this year, then-DCMS chief Paul Scully promised the government would discuss any changes to gambling tax with the industry. He said this would ensure the "racing tax revenue" in the horse racing sector was maximized. A month later, Lucy Fraser replaced Sculley.
Reaching critical point
BGC said in a statement that 10,000 people in the gambling and betting ecosystem have lost their jobs since 2019. This is partly due to COVID-19, but also due to the UK Government and the Gambling Commission. Both seek to hinder the industry.
The regulated ecosystem is currently responsible for providing around £4.2 billion ($5.3 billion) in tax revenue to the government. If the tax increase plan goes ahead, it will mean less tax revenue, not more. This may be a result of an increase in black market gambling, which is already on the rise in the UK.
The cost of live streaming horse racing is also rising rapidly, with operators having to spend more to maintain viable profit margins. They are likely to pay more than 16% more, or about £30 million ($37.84 million), for streaming rights over the next two years.
BGC added that the use of unregulated online gambling sites has increased significantly, according to a PwC study conducted by PricewaterhouseCoopers. In the past few years alone, this number has increased from 210,000 to 460,000. Once the UK government implements all planned restrictions, a massive exodus is expected.
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Source: www.casino.org
