BGC Warns Against New Gambling Tax Structure Proposed in Great Britain

Prepare for a critical battle in the world of British gambling as the Betting and Gaming Council (BGC) sounds the alarm over a proposed gambling tax overhaul. This seismic shift, announced during the Autumn Statement by Chancellor Jeremy Hunt, has ignited fierce opposition from the BGC, labeling it a ‘Trojan Horse’ concealing a potential tax hike for the industry. Dive into the controversy as we explore the implications of this tax simplification measure, shedding light on its far-reaching consequences for various sectors, including horse racing. The stakes are high, and the BGC is demanding a rethink before it’s too late.

The British gambling industry finds itself at a crossroads as the Betting and Gaming Council (BGC) takes a resolute stance against a proposed gambling tax restructuring that has sent shockwaves through the sector. This tax overhaul, introduced by Chancellor Jeremy Hunt during the Autumn Statement, has become a contentious issue, with the BGC raising alarm bells and branding it a ‘Trojan Horse’ hiding potential tax hikes for the industry.

Currently, the gambling tax landscape in Great Britain comprises three distinct categories: remote gaming duty at 21% of remote gaming profit, general betting duty at 15% of net stake receipts (equivalent to gross profit from bookmaking), and pool betting duty set at 15% of receipts. However, Chancellor Hunt’s proposal seeks to replace this structure with a unified tax framework that covers all forms of remote gambling.

The Chancellor’s intention to redefine remote gambling encompasses activities offered through the internet, telephone, TV, and radio, and this proposal has triggered a significant backlash from the BGC. The council, which represents the interests of the gambling industry, has raised valid concerns regarding the potential negative impact of these changes, particularly on the realm of sports.

One of the key areas of concern highlighted by the BGC is the potential adverse effect on horse racing. The proposed tax restructuring, if implemented, could place a heavy burden on this sector, potentially leading to reduced margins, fewer offers for punters, and diminished funding for sponsorship and promotion of the sport.

Michael Dugher, Chief Executive of the BGC, voiced his apprehensions over the proposed changes and called for a thorough reconsideration. He emphasized the precarious financial situation of horse racing, which relies heavily on betting operators for its prosperity. Dugher pointed out that the government’s actions, as outlined in a recent white paper, are already threatening the industry, making additional tax increases a significant concern.

Moreover, Dugher criticized the Treasury for proceeding with these proposals without consulting the Department for Digital, Culture, Media, and Sport (DCMS), the governmental body responsible for overseeing betting and racing matters. This lack of coordination raised questions about the government’s commitment to supporting the gambling industry.

Dugher expressed concerns that these tax simplification measures might serve as a facade for further tax hikes on businesses, potentially leading to job losses and reduced investment in the industry. The consequences of such actions could jeopardize the competitiveness of British horse racing on a global scale, putting its rich heritage and legacy at risk.

It’s important to note that these tax changes will exclusively affect remote gambling, leaving land-based operators and their tax structures untouched. The BGC also previously criticized what it described as a stealth tax raid on casinos, which could cost the sector £5 million annually, related to the freezing of gaming duty bands.

Chancellor Hunt’s proposed tax restructuring comes amidst ongoing ramifications from the Gambling Act review white paper, published in April. This white paper outlines the future regulation of gambling in the UK’s digital age and includes several proposals currently under consideration by the Gambling Commission.

The industry’s response to these developments has been a mix of concern, opposition, and cautious optimism. With numerous proposals and consultations in progress, the fate of gambling taxation in Great Britain remains uncertain, with potential far-reaching effects on the industry and its various stakeholders.