UK government to raise Remote Gaming Duty to cover FOBT revenue shortfall
DCMS confirms it will increase Remote Gaming Duty on UK-licensed operators after pledging to cut maximum FOBT stakes to £2
The UK government is to increase Remote Gaming Duty (RGD) on UK-licensed operators to help cover an expected shortfall in tax revenue resulting from its pledge to slash maximum FOBT stakes from £100 to £2.
The Department for Digital, Culture, Media & Sport (DCMS) this morning announced it would raise RGD, which is currently set at 15% of profits, at the next budget to “cover any negative impact on the public finances”.
The tax increase will be used to cover lost revenue resulting from a reduction in maximum stakes on fixed odds betting terminals, which the government finally confirmed today would be slashed to £2.
The DCMS did not specify how much RGD would be raised by but Regulus Partners estimates it could lead to an additional remote tax burden of c. £200m, assuming RGD increases to 20% and General Betting Duty remains at 15%.
Responding to the announcement, Sky Betting & Gaming CEO Richard Flint said: “Increasing an already heavy tax burden will clearly have an impact on our plans to create new jobs in the North of England in the years to come.
He added: “Rather than punishing a UK based job creator, the government should focus on getting a fairer tax contribution from other tech companies who, unlike us, don’t already pay sufficient taxes on their UK activities.
“There are a number of wider proposals in today’s Gambling Review based around online safety which we welcome.”
In addition to increasing RGD, the government today also confirmed plans to introduce stronger age verification rules and proposals to require operators to set limits on consumers’ spending until affordability checks have been conducted.
Minister for Sport and Civil Society, Tracey Crouch, said: “While we want a healthy gambling industry that contributes to the economy, we also need one that does all it can to protect players.
“We are increasing protections around online gambling, doing more on research, education and treatment of problem gambling and ensuring tighter rules around gambling advertising.
“We will work with the industry on the impact of these changes and are confident that this innovative sector will step up and help achieve this balance.”
Gambling Commission CEO, Neil McArthur, added: “Whilst we welcome the reduced stake, that alone will not be enough to address the risks of harm that can come from all forms of gambling.
“That is why we will continue to act in other ways to reduce those risks– including delivering enhanced consumer protection for online gambling in the areas of customer verification, fairness and interaction, implementing strong penalties for businesses who breach advertising guidelines, and reviewing gambling product characteristics to identify whether particular features pose greater risk of harm than others.”