Regulation has struggled to keep up with the speed of change and are continuing to play catch up with the rapid growth in the industry. Currently, the gross gaming yield of the British gambling industry is estimated to approximately £14 billion, and online gambling accounts for about £4.7 billion of the overall amount. These are not small numbers by any means and the UK Government has been quicker is ensuring that Taxes are levied while the industry grows and grows.
This has also posed some challenges to the operators, because country’s legislators realised that the great success of companies, measured in growth and prosperity, has been hurting local gamblers, their families and even entire communities.
To protect the consumer the UK Government and the Gambling Commission are implementing a number of bills, which are expected to take effect as early as 2019, having been passed by the country’s gambling regulators this year.
Following a lengthy review and waves of criticism, in May 2018, the Department for Digital, Culture, Media and Sport (DCMS) finally revealed a decision to slash the maximum wagers allowed at fixed-odds betting terminals (FOBTs) from £100 to £2.
Despite the fact that the HM Treasury revealed expectations that it could lose over £100 million on an annual basis as a result of the reduction of the FOBT maximum stake.
Until recently, the Government was ready to provide operators with the required delay, giving gambling companies until October 2019 to adjust their operations to the new requirements. However, the announced postponement fuelled a massive outrage among communities, anti-gambling campaigners and even Members of Parliament. The delay even led to the resignation of the then-Minister of Sports and Civil Society, Tracey Crouch, who was one of the most eager campaigners against the detrimental impact of controversial machines. Following the ubiquitous grudge faced by the UK Government, the British lawmakers finally decided to stick to the initially-announced date for the implementation of the reduced stakes. Several weeks ago, the Government announced that the reduction is to be officially made in April 2019.
Currently, gambling operators in the UK are required to pay a 15% point-of-consumption tax, which was originally introduced in 2014 as a way to tax British players using foreign online casinos.
However, the UK Government is trying to compensate for the losses that it is to suffer due to the fixed-odds betting machines’ maximum stake reduction. This has been one of the main reasons why local lawmakers decided to boost the tax to 21% so that the contributed amount makes up for the losses caused by the cuts, which according to some estimates would cost the exchequer more than £1.10 billion over a five-year period.
Still, despite the problems which UK gambling operators are expecting to face, the Government has revealed that the new point-of-consumption tax would help it provide all gambling companies which operate in the UK with equal opportunities. The HM Treasury revealed that the implementation of the new gambling tax rate will take place in 2019.
The UK Gambling Commission is also moving forward with campaigns and consultations to get operators to be more proactive in monitoring and preventing Gambling Harm.
One thing is certain as the industry continues to grow, new rules and regulations and increased monitoring will not be far behind.