Delivering the last scheduled Budget before the UK is expected to leave the EU, Chancellor Philip Hammond confirmed that Remote Gaming Duty would increase by six per cent, from 15 per cent to 21 per cent – effective from October, 2019.
The rise, which will come into effect in a year’s time, represents a significant leap in the tax burden for online gaming operators offering their services in the UK.
Hammond said the higher Remote Gaming Duty to help cover the loss in tax revenue generated by fixed-odds betting terminals, which have seen maximum stakes slashed from £100 to £2.
The Chancellor did not say when the change in FOBT stakes will come into force.
The new rate of 21 per cent – confirmed days after UK Prime Minister Theresa May announced that the UK’s age of austerity is “over” – represents the third time in four years that online gambling’s tax burden in the UK has effectively increased, following the introduction of point-of-consumption tax in 2014 and, in 2016, the so-called Free-Play tax.
Speaking ahead of the anticipated rise, David Clifton, director at Clifton Davies Consultancy, said: “Its seems a long distance now, the days of Tessa Jowell, the former Minister of Culture, Media & Sports under Tony Blair, stating that the UK would lead the world in terms of gambling, through light-touch regulations”.
Clive Hawkswood, CEO of the Remote Gambling Association, speaking alongside Clifton at the CasinoBeats Summit, commented: “There is really no time for a grieving process, anyone who deals with the government recognises that fairness does not come into play… you might as well shout at the moon.”
Hawkswood was addressing comments from minister Tracey Crouch that an increase in Remote Gaming Duty is necessary “in order to secure government finances, and to protect the funding of vital public services”.
The news came moments after trading on the London Stock Exchange closed, meaning share prices for London-listed giants such as William Hill, GVC and Paddy Power Betfair were unable to react. All eyes will be on tomorrow’s early trading.