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UK Authorities Consider New Gambling Tax Proposal

- November 21, 2016 By Oliver Young -

Operators already pay a 15% point of consumption tax.

The UK is considering introducing a tax on free spins and bonuses.

It seems that UK gambling operators might face a tax increase in the upcoming period, as media in the country reported that the Government might introduce a new tax provision that will result in taxation of free spins and other bonuses.

This new measure, if implemented will directly affect UK’s gambling operators who will have to pay extra taxes at the end of the year. This will be another in a series of measures that will change the face of the industry. Last year, the UK Gambling Commission introduced changes to the Licence conditions and Codes of practice. However, the new taxation provisions will directly hit the operators’ pockets in an attempt to collect more money.

Free Spins and Bonuses Might Be Taxed in the Future

The possibility of an increased taxation was condemned by the Remote Gaming Association. The chief of the Association stated that the operators are already paying more than enough in taxes and that such a decision will double the amount of money that is currently collected by the tax authorities.

Revenue and Customs intend to tax all free spins and bonuses, claiming that it is a fair approach, since sports betting bonuses are already subjected to taxation. If authorities go through with the initiative its implementation will begin by the end of 2017. Online gambling operators are already paying a 15% Remote Gaming Duty.

Certain experts have already warned that the new tax will disproportionally affect smaller gambling operators and might result in further mergers between gambling companies. The result of that, they claimed, would have a negative effect of the whole industry as there will be less competition, which in turn will hurt the gamblers, as they’ll have fewer options.

The introduced 15 point of consumption tax is already a very heavy burden on operators, as even smaller online gambling operators pay as much as £10 million per year.

FOBTs still a Hotly Debated Issue

Online operators aren’t the only ones who are facing increased taxation. Land-based operators might also be affected as there has been a somewhat successful campaign against the popular Fixed odds betting terminals (FOBTs). These terminals can be found in almost every high street betting shop and last year it was reported that FOBTs are one of the main sources of income for sports betting operators.

The current maximum wagering limit for FOBTs is £100, but the Government is reviewing their status and there have been certain indications that the limit might be lowered, as many feel that it is too high.

Operators currently earn up to a total of £1.7 billion per year from FOBTs and a decrease of the maximum wagering amount might result in a serious decrease of revenues for many operators.

It is even reported that some operators are considering measures that will lower their expenses, and some might even resort to reducing staff. The Culture Minister, Crouch expressed her surprise at the fact that the Association of Bookmakers wasn’t present at the latest meeting of the Common’s All Party Group on FOBTs. The chief of the Gambling Commission and Labour’s MP Carolyn Harris also expressed criticism of the Bookmakers’ absence from the meeting.

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