The United Kingdom’s Betting and Gaming Council (BGC) has declared their backing for a mandatory levy on the gambling sector to aid in financing research, education, and treatment (RET) services for individuals struggling with gambling issues. However, their support is contingent upon the tax being independent and differentiated for various business types, with the aim of shielding brick-and-mortar establishments.
Reports indicate that the government’s forthcoming document on gambling in the UK will propose a uniform 1% tax across all gambling enterprises, implying that land-based businesses will bear the same rate as their online counterparts.
The BGC has asserted that their investigations reveal a flat 1% tax on land-based businesses would result in a 10% to 15% reduction in their post-tax profits. This disparity arises from the fixed expenses, such as rent and personnel, that land-based businesses shoulder, unlike their online counterparts.
The BGC further highlighted that numerous land-based businesses in the UK are still in the process of recovering from the pandemic’s impact. They emphasized that escalating costs and high inflation levels signify that any additional expenses could have detrimental consequences for their operations.
Previously, the BGC had advocated for a mandatory contribution from the gambling industry to RET services. However, they implored the government to implement a sliding scale, lowering the tax rate for land-based businesses due to their significantly higher fixed costs.
Ive been saying this for a while now, I’m calm about the so-called obligatory tax, as the funds are already being collected from BGC members, they’re already dispersed autonomously from the sector, and it was proposed by the BGC to the government last year that contributions should be compulsory,” stated Michael Dugher, BGC Chief Executive (pictured).
“However, we desire to witness the RET financed in a sustainable manner, on the condition that it acknowledges the greater cost burdens encountered by land-based operators, thus there must be suitable safeguards in place, and the funds continue to be allocated efficiently and genuinely independently.
“For those unfortunate individuals grappling with the most severe instances of ‘problematic gambling’, treatment is absolutely essential, they often present with a variety of complex health issues and require treatment in clinics, they constitute a small percentage of the broader definition of problem gamblers by the Gambling Commission.
“But most significantly, any new system must be stratified to safeguard land-based operators such as bingo halls, casinos, and betting shops, who bear a disproportionately high fixed cost due to buildings and tens of thousands of employees. They are still struggling in the aftermath of the pandemic, like all other retail, hospitality, and entertainment enterprises, confronting all the challenging economic headwinds.”
The administration asserts that they believe lenient regulations and reduced taxation are beneficial for corporations. They are concerned that this new levy might lead to job losses or trigger the closure of more enterprises.
Subscribe to the iGaming newsletter.