UK government opens consultation on single tax for remote gambling
The government has also called for industry input on the potential consolidation of the three remote gambling tax rates.
HM Revenue & Customs (HMRC) and the Treasury have today proposed a single remote gambling tax is put in place for all remote gambling activities. This will be called, the Remote Betting & Gaming Duty.
The government has sought input from industry stakeholders on the proposed Remote Betting & Gaming Duty, so that it can better understand how its reforms can best meet objectives, while also simplifying the tax system and reducing administrative friction for all stakeholders.
Current gambling tax rates not inline with changes to public consumption
Currently the UK has three tax rates in place; Remote Gaming Duty (RGD), General Betting Duty (GBD) and Pool Betting Duty (PBD).
“The tax system needs to keep pace with the developments and innovation that have seen the UK-facing remote gambling sector change significantly in recent years,” James Murray, Exchequer Secretary to the Treasury, said in the proposal document.
“Since remote gambling was first developed it has grown exponentially; the three-tax system needs to adapt to reflect the dynamic and expanding nature of the sector.”
The government said the justification for remote activities being subjected to different rates is not in line with the consumption changes over the years. Currently remote activities are hit by RGD at 21% of operator profit, while GBD is taxed at 15% of profit, and PBD at 15% of net stake receipts.
The consultation process for the RBGD is running for the next 12 weeks, and will close 21 July. The government is expected to set out its final plans during the Autumn Budget 2025.
‘No strong rationale’ to maintain current three-tax system
HMRC and the Treasury said it had reviewed the current tax structure and its objectives for the industry, such as reducing player harm, and it believes that there is “no longer a strong rationale to maintain” separate tax distinctions.
The consultation process is seeking input from industry stakeholders on how government should build the tax framework and its basis for calculating said tax.
It is also asking for recommendations on which activities should be brought into the scope of the tax and potential sanctions for non compliance. It is also seeking input on the treatment of free-play bonuses, free bets and prizes.
“Gambling has increasingly shifted online, with gross gambling yield for remote gambling now at £6.9 billion per year, having seen over 200% growth in the last 10 years and 20% growth in the last 5 years.” Exchequer Secretary Murry noted in the proposal document.
New gambling tax system hinted at in 2024 Autumn Budget
Ahead of the government’s Autumn Budget last year, media speculation suggested the gambling sector could face heavy-handed reforms, with reports suggesting the Labour government was considering proposals to increase remote gambling tax by up to 50%.
The media speculation had a huge impact on the sector, with gambling stocks tumbling in response.
But a few days later the industry came through the Autumn budget without the threat of a tax rate increase. However, budget filings at the time did state the government would consider how to consolidate the UK’s gambling tax structure.
“The government will consult next year on proposals to bring remote gambling (meaning gambling offered over the internet, telephone, TV and radio) into a single tax, rather than taxing it through a three-tax structure. This will aim to simplify, future-proof and close loopholes in the system,” the budget papers said.