Bookies respond to new online free bets tax

Bookies respond to new online free bets tax

Thursday, March 17, 2016 Totally Gaming
RGA chief executive said the decision adds to the industry's "significant tax burden"

In the latest fiscal blow for the industry, online gaming companies will be taxed on all free and discounted bets placed in the UK under plans announced in the Budget.

Remote gaming operators currently benefit from a more generous tax treatment when they offer discounted or free gambling to customers in Remote Gaming Duty than would be the case for land-based operators offering free bets on things like football and horseracing. In his Budget on Wednesday, Chancellor George Osborne said that the Government will “amend the tax treatment of freeplays in Remote Gaming Duty to bring it into line with the tax treatment of free bets in General Betting Duty”, which stands at 15 per cent.

According to a forecast published by the Office for Budget Responsibility, the amended treatment of freeplays will result in £45m (€57.0m/$64.6m) being contributed by the gambling industry in the 2017-18 fiscal year, with that rising to £110m by the 2020-21 fiscal year.

While gaming companies saw their share prices rise following the Budget, as a rumoured hike in fixed odds betting terminal duties did not transpire, Remote Gambling Association chief executive Clive Hawkswood told TotallyGaming.com that it was yet another blow for the sector, which has suffered since the introduction of the Point of Consumption Tax last year.

"On top of the significant tax burden imposed by the POC regime, we are not surprisingly sensitive about further tax costs being imposed on the industry," he said. "However, we will be assessing what the real impact of this will be and have already discussed next steps with HM Treasury."

William Hill communications director Ciaran O’Brien told TotallyGaming.com: “The industry has been hit by some £500m in additional taxation in recent years and this is a further hit we could do without. We will be looking at ways to mitigate it and hope that our respite will finally come in the 2017 budget.

“We thought we had dodged a bullet with Mullins failing to land his four timer on Tuesday but the Budget has meant that whatever happens on the racecourse Wednesday will likely be the biggest loser for the betting industry during Cheltenham week.”

The Budget also outlined the timetable for the introduction of a new funding system for UK racing. A consultation period with betting and racing "to inform the level of contributions from betting" will start this spring, the government said, which would also "draw on the expertise" of the Levy Board to help decide on a rate.

During the summer and autumn the state aid notification process with the European Commission would take place, with the statutory instrument needed to bring in the new system published by the end of the year. As had been previously announced, the new funding model would come into force in April 2017.

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