The Betting & Gaming Council (BGC) has slammed the UK government’s proposed gaming duty simplification measures as a “trojan horse to further raise taxes”.
In the Autumn Statement, the government said it planned to consult on a proposal to launch a single tax for remote betting duty, instead of the current three-tax structure.
These consist of general betting duty and pool betting duty, both of which are taxed at 15% of revenue and comprise pool betting, spread betting and exchange betting.
Other kinds of remote gaming, including fixed-odds sports betting and online casino, are liable for remote gaming duty, which is subject to a 21% tax on revenue.
The government has not confirmed whether the tax simplification will involve increasing all three duties to the top rate.
However, given the pressure on the public purse, it seems unlikely the government will move to lower remote gaming duty.
Michael Dugher, BGC chief executive and former Labour MP, said that any new tax rises could represent “a hammer blow” for the finances of the horse racing industry.
“This is a sport which relies heavily on betting operators for its success and yet the government appears determined to draft in measures which shrink the industry with huge ramifications for other sectors, like horse racing,” he said.
“What’s worse, the treasury didn’t bother to consult or even inform DCMS, which is the department responsible for betting and racing. It seems they are high on tax but low on joined up government.
“There are genuine fears that any so-called simplification of the current tax structure will be nothing more than a trojan horse to further raise taxes on businesses,” he added.
Gambling sector regulatory pressure in UK
The BGC highlighted that the UK’s online gaming industry is already facing regulatory pressure from the responsible gambling provisions of the government’s Gambling Act review white paper.
These include the potential impacts of the proposed tiered 1% statutory revenue levy to fund research, education and treatment projects. This is planned to replace the current voluntary arrangement.
Many in the industry are also concerned that the planned imposition of affordability checks could repel customers if they are designed in such a way to necessitate the uploading of bank statements and other private documents.
While the potential increase in remote gaming duty could serve as a boon to the land-based sector, the government also effectively increased the tax rate of the retail sector in the budget.
This was done by freezing the gross gaming yield bandings for gaming duty from April 2024 until 31 March 2025. Due to inflation, this means casinos will face an overall increased tax burden.
Betting and Gaming Council (BGC) CEO Michael Dugher has called on the UK’s incoming Prime Minister to deliver “radical and transformative” change to the country’s gambling sector.
However, Dugher urged the government to focus first on the rapidly deteriorating cost of living crisis in the UK, as spiralling inflation and energy costs pose a looming threat to businesses and individuals across the nation.
Against this backdrop, Dugher said, upcoming government plans for the introduction of a new white paper on the UK’s gambling sector will rightly be far from the top of a growing list of priorities.
Plans for a new Gambling Act have been repeatedly delayed this year, with the most recent setback arriving as a result of Boris Johnson’s resignation as Prime Minister in July.
Between the political instability caused by the soon-to-conclude leadership race to decide the next leader of the Conservative party, and the mounting financial pressures on UK households and businesses, Dugher insisted that the government’s time would be better spent tackling the issues that matter most to the British public.
“The forthcoming white paper feels like a barnacle that needs to be scraped off the bottom of the government’s boat,” he wrote in a new column for PoliticsHome.
While changes to the gambling sector are required, he argued, “the overwhelming majority of MPs, like their constituents, don’t spend their time obsessing about people having a bet.”
BGC CEO Michael Dugher: “The forthcoming white paper feels like a barnacle that needs to be scraped off the bottom of the government’s boat.”
He was also quick to argue that the gambling industry – particularly the major operators and household names which make up the bulk of BGC membership as the UK sector’s leading trade and standards body – has taken innumerable steps in recent years to curb the dangers of gambling-related harm.
Measures introduced on a voluntary basis by UK gambling firms include safer gambling messaging making up at least 20% of all advertising, an additional industry code on online advertising preventing the exposure of gambling ads to under-25s, and the dropping of TV advertising during the breaks in live football matches before the watershed.
Further, Dugher suggested that overzealous and unnecessarily restrictive reforms could work against what should be the new government’s top priority, namely the strengthening of the British economy.
“This is an industry which supports 119,000 jobs, contributes £7.7bn to the economy and generates £4.5bn for the Treasury each year – important things to consider given the precarious state of the British economy,” he said.
One controversial element of the proposed Gambling Act review – purported details of which have been leaked in recent months in the mainstream media – is that of affordability checks, and the thresholds that might trigger what are often seen as intrusive requirements, with punters expected to provide bank statements and other personal data to be allowed to continue gambling.
BGC CEO Michael Dugher: “[Affordability checks] need to be carefully targeted at the most financially vulnerable and those showing any signs of what we call ‘markers of harm’, of problem gambling, not the overwhelming majority of punters who gamble safely and responsibly.”
While many in the industry have been vocally opposed to the introduction of such checks, Dugher urged a measured approach to the idea.
“We do want to see enhanced spending checks (‘affordability’ checks),” he said.
“Indeed, many operators are already doing this. But these need to be carefully targeted at the most financially vulnerable and those showing any signs of what we call ‘markers of harm’, of problem gambling, not the overwhelming majority of punters who gamble safely and responsibly.”
Reforming the industry should be done on a basis of evolution, not revolution, Dugher argued, suggesting that a new legislative bill is not required to deliver the gambling sector changes that the country needs.
A brand new Gambling Act would kick start a process that would take “forever” to be approved in parliament, he said, whereas “these reforms can be achieved quickly and introduced almost immediately through a combination of voluntary, regulatory and secondary legislative changes.”
“In the comings weeks [government] ministers can quickly put together a package of reforms to gambling that cumulatively will be genuinely radical and transformative.
“They can do so without wasting time getting bogged down in endless statutory procedures, or embarking on policies that will wreck jobs, threaten sport and broadcasting, or trample all over people’s legitimate right to spend their own hard-earned money on things they like to do like having a bet,” Dugher concluded.
The UK gambling industry is feeling the effects of rising energy prices amid fears that this may be just the beginning of a global power crisis.
The UK’s Betting and Gaming Council (BGC) today (22 August) said urgent action is needed by the country’s next prime minister to protect the hospitality and leisure sector from “catastrophic” energy price hikes.
Covid-19, climate change and the Russian invasion of Ukraine have all disrupted global energy markets.
Since early last year, global oil prices doubled, coal prices nearly quadrupled and European natural gas prices increased almost seven-fold, the International Monetary Fund (IMF) summarised, while the International Energy Agency warns that the worst of the global energy crisis is yet to come.
The hospitality industry is expected to be one of the biggest losers of the current situation – having already been hit hard by the coronavirus pandemic – and is likely to feel the pinch of consumers’ waning purchasing power.
BGC CEO Michael Dugher: “The cost of simply doing business is rising at an exponential rate. If urgent action isn’t taken soon, continued energy price increases could have a catastrophic impact across the hospitality and leisure sector.”
Against this backdrop, BGC CEO Michael Dugher said brick-and-mortar casinos and betting shops were being hit hard by soaring energy bills, just like the rest of the hospitality sector.
“The cost of simply doing business is rising at an exponential rate. If urgent action isn’t taken soon, continued energy price increases could have a catastrophic impact across the hospitality and leisure sector,” he said.
Britain hosts some 6,500 betting shops on hard-pressed high streets, in addition to 121 casinos supporting the hospitality and tourism sector.
Together they directly employ 44,000 people and support a further 48,000 jobs, while contributing £4bn to the UK economy and generating £2bn in taxes each year. This includes 537 independent betting shops who have over 2,700 employees.
While the UK is not the only country affected by the energy crisis, UK energy prices are now higher than in comparable economies like France and Italy, CNN points out.
The UK statistics office said natural gas prices rose nearly 96% in the year to July, while electricity prices are up 54%.
Many blame the UK’s “broken energy market” for the situation, whereby the recent bankruptcy of smaller companies (that traditionally offered more competitive prices) and the country’s high dependence on gas to generate electricity created the “perfect storm”.
Businesses across the UK are now preparing for an unprecedented rise in energy costs this winter. Many deals are due to be renegotiated in September and October, and companies are facing average cost increases of 300% under new contracts being offered, according to the BGC.
“Casinos are a vital pillar of the hospitality and tourism sector in cities and towns across the UK. Just like the rest of the hospitality sector they are struggling to build back after the global pandemic and now they face a new crisis,” Dugher added.
“Meanwhile bookmakers, which play a critical role on the UK’s hard-pressed high streets, face similar challenges. In short, any business which welcomes customers into a building must grapple with this energy emergency.”
The BGC’s warning comes after Rank Group last week revealed energy costs hit £23m in the last financial year, up from £13m, with concerns they could hit £46m this year at current market prices.
Elsewhere, Entain’s CFO Rob Wood commented that the group’s half-year results showed that online gaming revenues fell, in an early sign that customers are beginning to cut their spend in the face of soaring cost pressures.
Although Entain’s retail business came in ahead of expectations, with volumes in Q2 ahead of pre-Covid levels, Wood warned it was “unlikely” that macro factors would have no impact at all on retail spend and performance.
While Evolution continued on its growth path in Q2 2022 as it delivered record quarterly revenue of €344m, CEO Martin Carlesund also said: “Our fast expansion is affected by the current cost inflation especially in categories like energy, logistics, semiconductor products and wages.”
A range of interventions has been suggested to protect businesses and bill payers from the price hikes, but no specific measures have been taken to protect the hospitality and leisure sectors.
The Betting & Gaming Council (BGC) has welcomed the publication of record low problem gambling figures in the UK, recently released by the Gambling Commission.
Alongside this welcome news, however, the trade association was quick to point out that upcoming government reforms – in the shape of an impending review of the 2005 Gambling Act – may have an impact upon “regular punters”, and drive more traffic to unlicensed, offshore operators.
Problem gambling in the UK has remained historically low at 0.2% in the first half of 2022, according to the latest Gambling Commission figures.
The statistics showed the rate of problem gambling was down from 0.4% in 2021, and remained the same as the last published annualised figures in April 2022.
The rate of problem gambling among women stayed at 0.1%.
While these rates are low by international standards, figures released last week by Gamstop, the UK’s self-exclusion scheme for online gambling, painted a different picture.
Gamstop recorded 9% more sign-ups in the first six months of 2022 compared to the same period in 2021, while 1 July marked the day with the highest number of single-day registrations since the service first went live in April 2018.
BGC chief executive Michael Dugher: “The latest problem gambling figures will come as a blow to anti-gambling prohibitionists who like to vastly overstate the issues to suit their efforts to treat gambling like tobacco, not like alcohol, but it also provides food for thought for new ministers considering a white paper this autumn.”
Both sets of statistics come at a time of much discussion about the future of iGaming in the UK, with the government’s white paper on gambling law reform expected to be published in the autumn.
Against this backdrop, the BGC warned that it is “essential that we do not do anything that inadvertently drives any of the 22.5 million regular punters away from the regulated industry and into the arms of the unsafe, unregulated and growing gambling black market online”.
The association further commented that “most problem gamblers do not suffer from addiction, gambling addiction requires a clinical assessment. The two are often conflated, but they are entirely different.”
Good news from the Gambling Commission: Problem gambling rates – falling and low by international standards – are at 0.2%.
My reaction here: Welcome news, no room for complacency, but food for thought for ministers as we look forward to the white paper. https://t.co/iLL5G4OwHI
— Michael Dugher (@MichaelDugher) July 29, 2022
BGC chief executive Michael Dugher said: “These newly released figures are yet again further evidence of the positive progress we have made on problem gambling, which is low by international standards and has fallen in recent times, thanks to the many initiatives we have taken including using advertising to promote safer gambling tools like deposit limits and time-outs, as well as other changes we have made to further raise standards.
“The latest problem gambling figures will come as a blow to anti-gambling prohibitionists who like to vastly overstate the issues to suit their efforts to treat gambling like tobacco, not like alcohol, but it also provides food for thought for new ministers considering a white paper this autumn,” Dugher added.
The BCG considers the white paper “an opportunity to drive further changes”, but Dugher also warned that “the new government should be guided by evidence and seek to carefully target future measures on problem gamblers and those at risk – not intrude on the perfectly safe enjoyment of millions of punters whose choice of leisure does so much to support jobs and the economy, as well as providing a lifeline for sports like racing.”