Remote UK Betting Tax to Rise as Part of 2019 Budget

Remote UK betting tax is set to increase by six percent as the Treasury looks to plug the gap left by reducing the maximum stakes for fixed odds betting terminals (FOBTs).

Philip Hammond betting tax

Chancellor Philip Hammond has confirmed the UK betting tax rate for online operators will increase to 21 percent. (Image: Getty/FN London)

In announcing his 2019 budget, Chancellor of the Exchequer Philip Hammond has said remote gaming duty will rise to 21 percent. The move comes amid growing pressure from anti-gambling advocates to bring forward the new £2 FOBT betting limit.

Remote Betting Tax Hike to Cover FOBT Losses

Assessing the impact of lowering the maximum wager on live gaming terminals, the Treasury believes the national coffers will lose around £245 million. To offset the loss, Hammond says the new UK betting rate for online operators will generate up to £255 million in revenue by 2021.

Also announced in the budget was the implementation date for the much-discussed FOBT changes. Despite early estimates pointing towards April 2019, the chancellor said the new rules won’t come into force until October.

By that time, it will have been 18 months since the government decided to cut the maximum bet from £100 per round. However, despite the extended deadline, online operators are unlikely to be happy with the latest tax hike.

Industry Already Reeling from Changes

Prior to the UK budget announcement, Clive Hawkswood, CEO of the Remote Gambling Association, told Bloomberg a rate of 20 percent was possible but it could be higher. Following up on the comments, gaming equity analyst at Goodbody Gavin Kelleher said anything above that limit could hurt the industry.

“While there is a timing risk that these two changes are brought forward, most likely to April 2019, the main negative next week is if the Treasury sees fit to increase RGD to 25 percent as opposed to 20 percent,” Kelleher told to Bloomberg.

Analysing the potential impact of a 21 percent UK betting tax rate, Global Betting & Gaming Consultants forecast that the government will profit to the tune of £75 million over five years. For remote online operators, the tax is likely to force structural changes in the coming months.

The one saving grace will be the advent of sports betting in the US. With William Hill, Ladbrokes Coral and Paddy Power already looking towards the emerging market, new revenue streams are set to open up.

However, for now, operators with a vested interest in the UK betting market will be taking stock of what is another blow to the industry.

Share Now: