UK Government Plans to Raise Offshore Gambling Duty

City of London, Westminster, United Kingdom

The UK government plans to make up for revenues lost through changes to fixed odds betting terminals by targeting offshore gambling companies with an increased duty.

Chancellor Phillip Hammond will likely increase the taxes on these companies in the budget that is to be released toward the end of October.

The chancellor has been drawing up a plan to raise the remote gaming duty, which is levied on offshore companies that provide online casino games like poker and blackjack. This move could bring in additional revenues of more than $1bn (£770m) in the next five years or so.

Why Is This Move Being Made?

The reason for this move is the loss in revenues caused by the government’s decision to lower limits on fixed odds betting terminals (FOBTs). These terminals have caused major issues for problem gamblers, so something had to be done.

The maximum stake allowed when betting through an FOBT has been reduced from £100 to £2. That was done after a lengthy debate on the issue. The terminals had been a very lucrative source of revenue for bookmakers and establishments.

Some in the government had opposed making the change because about £400m ($519m) of the £1.8bn ($2.3bn) the government takes in from gambling comes from these terminals. Therefore, cutting the minimum stake will leave a significant hole in revenues.

Sports Minister Tracey Crouch was leading the charge for this move and got the green light during the summer to go ahead once the money could be made up from somewhere else.

Hammond will announce the new revenue-driving measures on October 29. After years of austerity, many hope that a more progressive budget is in the works.

It looks as if the duty on remote gaming operators will increase from 15% of their gross gambling yield to between 20% and 25%. The FOBTs are taxed at 25%.

The remote gaming duty was implemented a few years ago to create a more level playing field for domestic gambling operators and their offshore competitors. Any offshore company that has customers in the UK is subject to this duty.

Some operators that were originally from the UK now have their online operations based in Gibraltar, such as William Hill and Ladbrokes. They are going to be hit with this double whammy because their profits from terminals have been massively eroded and they also have to face this increase in the remote duty.

Measures to Reduce Problem Gambling

There is a growing trend toward increased problem gambling in the UK that needs to be addressed. Some people had been losing thousands every day through FOBTs because they could wager as much as £100 every 20 seconds on games like blackjack and roulette.

An advertising campaign is being launched to spread awareness of this issue. The Public Health in England authority will review how gambling is having a negative impact on public health levels.

Other measures being looked at include an age limit review for those who to play the National Lottery games. There has been a significant uptick in the number of young people playing these types of games recently.

The Gambling Commission has also ordered or introduced some tougher protections for the online gambling sector, such as enforcing stricter rules to verify player’s ages.

A group of MPs wants to make changes how gambling companies are allowed to advertise. They are pushing for an end to gambling ads being shown during live sporting events, as well as calling for a ban on gambling kit sponsors.

Young people are exposed to positive gambling messages constantly from a very early age. They see their favorite sports stars and celebrities promoting these gambling companies, and the activity becomes normalized. These young people are impressionable and such exposure can lead to serious problems in a developing person.

While significant issues still exist with problem gambling in the UK, it is good to see the authorities enacting so many changes and measures to help fight back against this problem.