SBC News Voice of the Sports Betting Industry
The ongoing consultation around betting tax is the biggest challenge the Betting and Gaming Council (BGC) is facing at the moment, the standards body’s CEO said in a recent interview.
Speaking to Martin Lycka’s Safe Bet Show podcast, Grainne Hurst stated that the proposed changes to British betting tax is the main policy challenge the country’s betting industry has to deal with.
“It had been mooted for a couple of years that the government was going to look into this, but we were quite surprised to see that the government are now looking at a single tax, and a single rate, for the three various taxes that we have in the UK on sports betting and online gaming.”
The government consultations on changes to the betting tax were first announced in late April and will run until 21 July. The main proposed change, as referenced by Hurst, is the merging of Remote Gaming Duty, General Betting Duty, and Pool Betting Duty into one single Remote Betting and Gaming Duty (RBGD).
The Labour government’s main motivation for doing so is to support its extensive investment plans across the UK, part of a wider ambition to foster further economic growth. However, the BGC, as well as stakeholders in the horse racing sector, are concerned about the impact this could have on bookmaker finances.
“We’ve been pretty clear at the BGC that that policy, if they combine them into one, which I would presume would be at the highest rate rather than the lowest rate, would be completely self-defeating for the government, for a whole host of reasons,” Hurst remarked.
Tax, racing and the black market
According to some reports, the respective betting and racing industries are having a slight difference of opinion on the potential betting tax raise. Both are concerned, but some media reports suggest that racing holds the view that it should be taxed differently to other forms of gaming due to the sporting contributions it makes to society.
This alleged divide was not referred to by Hurst in her recent interview with the Safe Bet Show. She did, however, raise a common concern shared by both betting industry and horse racing stakeholders – that being the black market.
An increase in betting tax will make things more expensive for UK betting customers, she said. This has led to the BGC labelling the prospective RBGD tax as a ‘punters tax’, arguing that it is ultimately the customer who will lose the most.
“Odds will get worse, places will be shortened if the tax is increased on the products,” Hurst said, asserting that there could be ‘loads of unintended consequences’ across betting and racing should a single rate be adopted.
“Customers won’t decide to stop using the products they like, they’ll just decide to stop using the products they like in the regulated sphere, and they’ll go elsewhere to get those products.
“In the black market, where there’s no regulation, they pay no tax, there’s no player protection whatsoever. It would also, in a UK context, be pretty catastrophic for the horse racing industry, because the horse racing industry is currently operating on pretty small margins, and if they see any tax increase on their products, it’s going to make that product pretty much unviable, which again nobody wants to see.”
More than just betting tax
The trouble the BGC and racing stakeholders may have in making this argument is that it is nothing new. The 2005 Gambling Act review began in late 2020 and the argument around the black market was heard throughout this and in the months since the publication of the White Paper on the review in April 2023.
Politicians, some of whom are already demanding more reforms, even though the Gambling Act review recommendations are still being adopted and consulted on, may be tired of hearing this argument.
On top of this, the betting tax raises and black market are not the BGC’s only focus. Hurst summarised the tasks ahead of the BGC, noting that the trade body’s priority remains delivering ‘the outstanding elements of the Gambling Act review’.
“There are a few elements we’re still waiting to see through throughout the end of this year, and maybe some that might take a bit longer, waiting for casino modernisation in the UK,” she said.
“We’re waiting to understand what the new mandatory levy looks like, and then we have the issues around affordability, anti money laundering, codes and provisions still to nail down between ourselves, the government and the Gambling Commission.”
