Online gambling companies are set to face an increase in taxes to combat gambling addiction, while bingo establishments are set to benefit from the changes. Chancellor Rachel Reeves announced that the tax rate for remote gaming will rise from 21% to 40% starting in April next year. This sector already contributes significantly to the Treasury, generating £1 billion annually.
According to the Office for Budget Responsibility, doubling the tax rate is expected to bring in an additional £1.1 billion per year by 2029/30. The IPPR think tank had suggested raising the duty to 50%. In addition, a new general betting duty rate of 25% will be implemented for online gambling from April 2027, with horse racing exempt from this increase.
On a positive note, bingo halls will see a boost as the 10% duty on the game will be eliminated. Former Labour Prime Minister Gordon Brown advocated for higher taxes on online gambling profits, proposing that it could raise £3.2 billion to help lift 500,000 children out of poverty.
The Treasury emphasized the importance of raising taxes on online gambling to address the growing concerns of gambling-related harm while safeguarding traditional forms of gambling like bingo and horse racing. The OBR predicted that players might bear the brunt of the tax hike through increased prices and reduced payouts by operators.
Dame Meg Hillier, chair of the Treasury Select Committee, praised the decision to increase taxes on remote betting, emphasizing the need to address the harm caused by addictive casino games. She highlighted the cultural significance of sectors like racecourses and bingo halls compared to online gaming, which can have detrimental effects on vulnerable individuals.
Adam Rivers, managing director at Alvarez and Marsal, acknowledged the impact of the tax changes on the online sector but noted that the Budget provided relief for land-based bingo operators. Brant Dunshea, acting chief executive of the British Horseracing Authority, welcomed the decision to maintain the rate of horserace betting duties, recognizing the importance of racing as a national asset supporting thousands of jobs.
The adjustments in taxation aim to strike a balance between addressing gambling-related harms and supporting sectors that contribute to the community and economy.