UK: Restricting betting machines to a 2-pound limit and implementing a tax hike
The United Kingdom's administration has verified that Fixed-Odds Betting Terminals (FOBTs) will have a limit of £2 per stake. Besides this, the Remote Gambling Duty (RGD) will be raised to a minimum of 20%. The industry professionals are dissatisfied.
Last April during an unexpected declaration by the Chancellor of the Exchequer, Philip Hammond, bookmakers experienced a nightmare, and this expected nightmare seems to be coming true as the UK's administration has recently confirmed that the £2 limit will enter into force following a parliamentary vote in 2019.
In a poll in April, 62% of Members of the Parliament (MPs) advocated for this gambling regulation adjustment, even though a 98% reduction is anticipated to produce a budget tax hole of roughly £400 million. To fill in this substantial deficit, the online gaming tax is planned to be raised from its current 15% to at least 20%, which will provide around £200 million. This tax, also known as the "remote duty", has to be paid by all licensed online gambling providers present in the UK market. The intention behind these strict measures, according to the UK's administration, is to "create a fairer society for everyone".
Chief Executive Officer (CEO) of the UK Gambling Commission (UKGC), Neil McArthur, applauded the government's ambitions but indicated that simply reducing stakes is not enough "to eliminate all the dangers posed by different types of gambling", referring to the ongoing discussions for over a year. Jeremy Wright, the incumbent Sports Minister since 2015, is particularly worried about the "strikingly high rate of problem gamblers" within this sector. Approximately 14% of the gamblers who are invested in the extreme roulette games are already classified as addicts or are under high risk of becoming addicted. Wright is referring here to a UKGC study conducted in 2016 that scrutinized FOBT gambling behavior.
On the other hand, Tracey Crouch, the UK's Minister for Sport, stated:
"We want a prosperous gambling industry that contributes to the economy, but also one that does its best to safeguard players. We're also increasing protection for online gambling, spending more on research and education, and enhancing the treatment of problem gamblers. We are also introducing stricter guidelines on gambling advertising".
The Problem
FOBTs are digital betting machines that provide classic casino games, such as blackjack, but mostly roulette, and conventional slots. In the UK gambling scene, these machines have been considered the "crack cocaine" of slot machines. Since their introduction in 2001, roulette slots have been viewed as an unregulated anomaly in the UK gambling market while also becoming an essential sector for the industry, as each individual FOBT generates approximately £55,000 yearly.
There are currently over 33,000 FOBTs in the UK, the majority of which are found in the betting stores of the major licensed bookmakers. Gambling addiction experts have criticized these machines for years and describe them as harmful debt traps.
Disappointed Providers
Knowing that regulation was on the horizon, these operators were not expecting a £2 stake adjustment for FOBT terminals due to the risk of substantial tax losses. The additional increase in online gambling tax is hence a surprise for the entire industry, who refer to this as a "double whammy". Sky Bet's CEO, Richard Flint, issued a statement expressing disappointment:
"Increasing an already high tax burden will evidently impact our plans to create more jobs in the North of England in the coming years. Instead, the government should prioritize getting a fair tax contribution from other tech firms that don't currently pay sufficient tax on their activities in the UK."
GVC, the owner of bwin and Ladbrokes, is also "disappointed with the outcome", but sees some positives in the decision: "Today's announcement by the government ends the uncertainty around FOBT staking limits. It's now imperative that the industry is granted a suitable implementation period..." Besides Sky Bet and GVC, William Hill and Paddy Power Betfair are also evaluating the new landscape. The industry collectively is concerned about potential job losses due to this decision, so they will likely engage with the government forumer Champion.
Could These Measures Be the Start of More?
The number of FOBT problem gamblers is said to be even greater today than in 2016. As a result of lessening control, the UKGC submitted a series of concrete FOBT standardization proposals to the DCMS last March. However, these proposals propose more than £2 stake limitations.
The government has also announced plans for tighter age verification measures, where operators need to restrict consumer spending until affordability checks are completed. They suggest prohibiting multiple gaming machines together and various more restrictive methods like time and stake limitations for compulsive gamblers. These rules could especially aid the lower social classes. There's uncertainty if all these regulations will materialize completely, but they currently appear realistic.
Read also:
- What's making the Bayern leader appear so anxious?
- Most supporters desire Neuhaus to remain with the team.
- The referee for the upcoming cup final has been declared.
- Wohlgemuth announces two new names.
Source: www.onlinecasinosdeutschland.com
