HMRC nets £1.62bn in interim taxes as UK gambling returns to normalised environments

HM Revenue & Customs (HMRC) tracks £1.62bn in tax receipts generated by UK gambling during the first half of the financial year for 2022/2023 (April 2022 to March 2023).

The tax authority has published its latest data sets for ‘UK Betting and Gaming’ which include ‘provisional tax receipts’ on income generated during the interim months of 2022/2023 (April-to-September 2022).

Generating provisional receipts of £1.62bn, UK gambling records £164m (+11%) increase in tax income, compared to year-to-date 2021/2022 results of £1.45bn.

A breakdown of taxed categories saw the National Lottery and UK Remote Gaming (online casino) contribute the majority of tax receipts, generating respective YTD incomes of £490m and £461m – corresponding to 30% and 28% of total industry tax takings.

Yet, HMRC observes a decline in tax income generated by the National Lottery and Remote Gaming when matched against comparative YTD 2021/2022 results of £497m and £501m.

2022/203 provisional results mirror the return of land-based gaming duties, led by Machine Gaming Duties (MGD), which generated a tax income of £267m – compared to COVID-19 impacted YTD 2021 income of £106m.

General Gaming Duty (GGD) charged on land-based casinos stands at £76m, above respective YTD 2021/2022 of £11m and 2020/2021 of £35m. Despite an improved tax income, HMRC noted that GGD generated from land-based casinos still lagged behind 2019 pre-pandemic results.

Meanwhile, betting duties generated from fixed odds wagers and pool betting stand at £313m, tracking £20m (-6%) below tax income generated last year.

Reported under the General Betting Duties (GBD) category, fixed odds wagers (retail and remote) generated YTD income of £309m. The GBD stats reflect a softer April and July 2022 period, matched against peak 2021 comparatives that featured record wagering at Cheltenham Festival trading and UEFA Euro 2022.

In spite of pandemic circumstances, HMRC noted that “for the previous 3 financial years GBD yearly receipts have increased year-on-year, from £586 million in 2019 to 2020, to £595 million in 2020 to 2021, to £649 million in 2021 to 2022”

Within the gaming category, HMRC continues to register a year-on-year increase in income generated by Remote Gambling Duties (RGB), which reflect a consumer change to playing online casino games.

Compared to the traditional gaming categories of bingo, casino, and gaming machines – RGB is the only tax category that continues to register increased tax income on a quarterly basis.

The report noted, “over the previous 3 financial years RGD had increased year-on-year, potentially due to gamblers utilising online services in lockdown more so than they would if betting shops, bingo halls and other gambling premises were open as normal.”

The return of land-based gaming sees HMRC note the disappearance of income generated by Type-3 FOBTs machines taxed at a liability of 25%.

HMRC noted that a reduced £2 wagering limit on FOBTs machines applied since Q1 2019 had resulted in “higher rate liabilities decreasing in recent years, from £433 million in the 2018 to 2019 financial year, to £31 million in 2019 to 2020 financial year and less than £1 million in subsequent financial years”.

On Friday, the UK government announced the appointment of MP Paul Scully as the new DCMS Undersecretary for Tech and the Digital Economy. Scully becomes the fifth minister to oversee the Gambling Act review, whose White Paper is yet to be published,  needed to inform industry leaders and stakeholders on critical reforms related to customer affordability checks, compliance, wagering limits, advertising and football sponsorships.