UK Government May Introduce Single Remote Gambling Tax
The UK government has announced plans to introduce a new tax structure for remote gambling that would replace the current three-tiered system.
LISTEN TO THIS ARTICLE:Officials are also inviting feedback from the industry on combining the existing tax rates into a single framework. HM Revenue & Customs (HMRC) and the Treasury announced that they are suggesting the implementation of a unified Remote Betting & Gaming Duty (RBGD) to cover UK online casinos and all remote gambling activities.
Hoping to simplify taxation and reduce administrative work, the government has now requested input from the iGaming industry to ensure the new RBGD achieves its policy goals effectively while streamlining the process for all involved.
Existing Tax Rates No Longer Reflect Consumer Behavior
At the moment, three different taxes apply: the Remote Gaming Duty (RGD), General Betting Duty (GBD), and Pool Betting Duty (PBD).
The tax system needs to keep pace with the developments and innovation that have seen the UK-facing remote gambling sector change significantly in recent years. Since remote gambling was first developed it has grown exponentially; the three-tax system needs to adapt to reflect the dynamic and expanding nature of the sector.
The government explained that the original reasons for having separate tax rates for remote activities have become outdated, given the changes in consumer habits. Currently, RGD is charged at 21% of operator profits, while both GBD and PBD are taxed at 15%.
The consultation on the proposed RBGD will remain open for 12 weeks, closing on July 21. Final decisions are expected to be revealed in the Autumn Budget 2025.
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Calls to End the Three-Tier System
Following a review of the current system, HMRC and the Treasury concluded there is “no longer a strong rationale to maintain” distinct tax categories.
The consultation is hoping to gain industry perspectives on how the new tax should be structured, how the tax base should be defined, and which activities ought to be included. It is also asking for recommendations for penalties related to non-compliance, and how to treat free bets, casino bonuses, and prizes under the new regime.
Murray also spoke of the sector’s rapid growth and explained that gross gambling yield for remote gambling is now £6.9 billion per year after undergoing over 200% growth in the last decade and 20% growth in the last five years.
There were hints of a possible overhaul during the 2024 Autumn Budget. Prior to the announcement, the media was speculating that the government was considering a sharp rise, potentially up to 50%, in remote gambling taxes. The rumors triggered a sharp decline in gambling-related stock prices.
Ultimately, the budget announcement did not include any immediate tax increases. However, documents from the time noted that the government would explore options for consolidating gambling taxes.
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