In a significant statement made during the release of the UK’s Autumn Statement, Chancellor of the Exchequer Jeremy Hunt announced the government’s plans to propose changes to the tax system for remote gambling. The Autumn Statement, a pivotal document published by the government, contains economic forecasts alongside upcoming tax and spending policies.
The proposal from Hunt is aimed at initiating a consultation period on the potential restructuring of remote gambling taxation “shortly.” Remote gambling, according to the government’s definition, encompasses gambling activities facilitated via the internet, telephone, television, and radio.
Currently, the taxation of this sector is managed through a three-tier system comprising remote gaming duty, general betting duty, and pool betting duty. However, the consultation will focus on the prospect of dismantling this trio, paving the way for a unified tax system.
For the fiscal year 2022-2023, the duty imposed on remote gaming profits is at 21%, known as remote gaming duty. Another levy, the general betting duty, charges 15% on net stake receipts, earnings analogous to the gross profits accruing from bookmaking activities. Similarly, pool betting duty also charges a rate of 15% on the receipts collected from pool bets.
Importantly, as the consultation zeroes in on remote gambling, the taxes levied on land-based gambling establishments are not in the firing line of this proposed reformation, at least for the present time.
This announcement comes in the wake of the Gambling Act review white paper, which was released in April and delineated the direction of gambling regulation in the UK’s digital era. The white paper’s various proposals are under evaluation by the UK Gambling Commission, which plays a central role in the regulation of gambling in the country.
The Gambling Commission began its own consultation process on these proposals back in July. The initial phase of this process concentrated on several key areas, including addressing financial risk and player vulnerabilities, scrutinizing the design of online games, bolstering consumer choice regarding direct marketing, as well as enhancing the robustness of age verification procedures at physical gambling venues. This phase concluded in October. Later, Mandy Gill, the Commission’s director of compliance, conveyed that the consultation had garnered over 3,000 submissions.
The subsequent round of consultations planned by the Commission is slated to stretch across a 12-week period, focusing on seven pivotal topics. The closing date for this session is anticipated to be either in February or March, as per Tim Miller, the Commission’s executive director of policy.
During this next phase, among other aspects, the Commission will deliberate on the policy regarding players opting in for online bonuses and promotional offers as well as reforming how penalties against operators are assessed.
With these developments, the UK government is demonstrating a clear intention to stay at the forefront of regulatory innovation in the gambling industry. The consultation marks a critical step towards framing a more agile and unified taxing framework that can adeptly handle the complexities of remote gambling while ensuring the sustainability of tax revenues from this burgeoning sector. Change seems imminent on the horizon for remote gambling taxation, with potentially significant implications for the industry’s growth and alignment with modern technology and consumer habits.
