RGA: We will fight rise in Remote Gaming Duty
Trade body tells EGR increasing the tax burden on online operators to cover FOBT tax revenue shortfall is “unfair”
The Remote Gambling Association (RGA) has pledged to fight back against plans to raise taxes on online operators to cover a shortfall in lost tax revenue from FOBTs, describing the UK government’s justification as “unfair”.
The government yesterday announced it would slash maximum stakes on FOBTs from £100 to £2, with “any negative impact on the public finances” covered by a rise in Remote Gaming Duty (RGD).
RGD for UK-facing operators is currently set at 15% of profits and although no specific increase figure was given, the Department for Digital, Culture, Media & Sport (DCMS) said it would be announced at the next budget, with analysts suggesting 20% was the most likely figure.
Speaking to EGR Intel, Clive Hawkswood, chief executive of the RGA, hit back against the government’s plans and said the industry trade body aimed to fight against any tax rise.
“All this stuff about making up the shortfalls – they [the Treasury] have already done that and I think if that is the justification then it is an unfair one,” he said.
Hawkswood added: “In 2014 the tax revenues from online gambling were negligible but we estimate that next year they will exceed £800m. Surely that is enough already to fill any potential shortfalls?
“Plus, no one actually knows how much money will be lost from FOBTs and they won’t for a couple of years. If they are going to raise the tax then they will raise the tax, but don’t use that as a reason to justify it.
“It was only last autumn they introduced the tax on free-plays and that effectively pushed up the rate of remote gaming duty by about 5%.”
Hawkswood’s sentiments were echoed by Sky Betting & Gaming CEO, Richard Flint, who in an op-ed for the Yorkshire Post yesterday urged the UK government to reconsider increasing the tax burden on online operators.
“It can’t be right to increase our tax burden even further to pay for a change in regulations that are unrelated to us,” Flint wrote. “Especially when there are other, more equitable ways the government could raise any revenue it may need to cover this shortfall.
“If the Government wants to look only within the gambling industry, then what about closing the loophole that means companies based offshore don’t pay VAT on their marketing and other costs? This tax cost Sky Betting & Gaming around £30m last year so extending it to other companies could easily address any shortfall the reduction in FOBT stakes might lead to.”