What will happen with the UK gambling tax?

What will happen with the UK gambling tax?
What will happen with the UK gambling tax?

The UK gambling tax has been going through a lot of changes throughout the last couple of years. Although the government is trying to keep the industry as profitable it possibly can, there could be a lot of problems following the latest decisions made in the parliament. It looks like the tax plan for the gambling industry is going to go through a 6th change for the last 4 years, leaving operators disgruntled.

The UK may not be a safe haven for gambling operators, but it can sure boast a fine industry within its borders. Because of this, taxes bring in quite a substantial amount of revenue, however it doesn’t look to be enough. The government has decided to move the tax up to 21%, potentially severing any new additions and smaller players of the industry.

Gambling addiction in the UK

One thing worth considering is the growing problem the UK is facing right now. Gambling addiction is no joke and more and more people have been contacting the service hotline. The government is aware of this and their tax increase may also correlate with plans to reduce the numbers of gambling addicts. The large tax could help the number of casinos decrease within rural and suburban areas, where most of the customers come from. However, there are also fears that such a large tax will only enable large casinos to survive, therefore installing a monopoly. But all of this is just speculation.

The Chancellor’s decision

The UK Chancellor Philip Hammond, took it upon himself to review the Autumn revenue report, which ultimately led to the tax increase. It looks like the numbers are not sufficient enough and the parliament is desperately looking for ways to cover some losses.

As suggested by NorskCasino.online in their article, only big players may be able to survive the tax increase, as small players are just going to see losses and nothing else. Most of the times when losses are on the horizon companies are able to cover them up with extra traffic, but in this case it would prove a lot harder and costly, so many will have to face devaluation. Some may even close down. Video poker platforms are going to be hit the hardest by far, as their revenues exceed everyone in the industry, therefore warranting even more deductibles and costs.

But why? Why such a sudden decision to increase the tax? What made the government decide this? They needed to have a tangible reason right? Well, there is one big reason, something you can’t really argue about. The FOBT stake cut, which will most likely be happening next year and costing the UK quite a lot of its tax revenue over the next 4 years. The only backup plan is currently the RGD rate increase just to cover up the losses.

The FOBT stake cut

Fixed odds betting terminal aka FOBT stake cut will most likely be happening next October. The schedule was one of the most controversial topics for the parliament as well, There were numerous delays, speed ups and uncertainty about it, so the government decided to wait for a definitive date to be known, in order to announce the RGD rate increase. The RGD rate date is unknown, but it is clear as day, that it will be pegged to the FOBT cut. Most likely the two changes will be happening within the same month, which is October 2019.

Different feedback

It’s obvious that every gambling operator should be upset at this point and they are, truly they are. But some don’t show it as much as others do. Here’s the difference. There were actually rumors going around with the operators that the tax would be set at 25% instead of 21%, making them worried even more. Therefore the recent news about the tax being 21% has been such a relief for them that they completely forgot that it is still an increase and a hit to their profits. Nonetheless, nobody is happy with the increase. The giants may be faking their disappointment, as they’re trying to hide their excitement, because a larger market coverage may be coming their way as smaller operators will have to close down sooner or later.

Was all this necessary?

Here’s the deal. Most people don’t look at gambling too well and treat gambling addiction as an actual psychological situation. Therefore, the government is forced to come up with reasons why the country is still featuring them. Good tax revenue is the best reason there is. However, with the FOBT stake cut about to cost the country £1.15b the parliament quickly needed a solution to balance out the account. The RGD rate increase will bring in  £1.2b over the next 5 years, covering up all the losses and letting the government and operators retain their reasons of continued business.


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