UK Gaming Companies To Be Hit With New Annual Fee

Article by : Erik Gibbs Nov 26, 2024

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The British government is moving forward with plans to introduce an annual fee for casinos and bookmakers, estimated to raise £100 million (US$126 million) each year. This new “statutory levy” will replace the current voluntary donation system, under which gambling operators decide how much to contribute and where the funds are allocated. Gambling Minister Baroness Twycross is expected to announce the proposed change this week and could take effect as early as April 2024.

The tax will require gambling companies to contribute 1% of their gross gambling yield—essentially, their winnings from players in Britain. According to the Gambling Commission, the industry earned £10.9 billion (US$13.7 billion) in the past year, meaning the tax could generate around £109 million (US$137 million) annually. 

However, land-based operators, such as high street casinos and bookmakers, may face a lower rate of 0.4% due to their higher operational costs. Smaller businesses with gambling revenues under £500,000 (US$630,000) will be exempt.

The funds raised will be allocated to research, education, and treatment programs aimed at reducing gambling-related harms. Among the likely beneficiaries are new NHS clinics specializing in addiction, as well as smaller organizations offering school-based education and suicide prevention counseling. The tax is expected to create significant support for tackling the societal issues linked to gambling.

One potential controversy is the distribution of the funds. Under the current voluntary system, the leading gambling charity GambleAware receives a significant share of industry donations, amounting to nearly £50 million (US$63 million) in the past financial year. However, sources indicate that the government’s Office for Health Improvement and Disparities (OHID) is vying to oversee the allocation of the tax, which could lead to tension over which entity will manage the resources.

The announcement marks a milestone for advocates of stricter industry accountability. Iain Duncan Smith, chair of an all-party parliamentary group on gambling harms, called the move a “huge step forward,” emphasizing that the tax holds the gambling industry financially responsible for addressing the harm it causes.

While the Betting and Gaming Council (BGC), the industry’s main lobbying group, initially supported the idea of a mandatory tax, it has since expressed concerns. The BGC stresses the need for a sliding scale for land-based businesses with higher fixed costs and argues for the continued funding of established third-sector organizations that provide vital services.

The introduction of this tax signals a shift in how Britain handles the gambling industry’s social impact. By mandating contributions and regulating fund allocation, the government aims to create a more structured and accountable system to address gambling-related challenges.