A new gambling tax is looming for both land-based and online UK Gambling operators in the form of a Gambling Levy. The new levy is to take effect from the 1st of April 2024.
What is the New UK Gambling Levy
As explained above it’s a new mandatory tax on all Gambling establishments. The stated reason for the levy is to fund research and the prevention and treatment of gambling harm. The levy will fund the NHS and other organisations that provide problem gambling services.
The levy that operators pay will not be uniform. Land-based operators will pay 0.4% of their Gross Gambling Yield. Online Operators will pay 1% of the Gross Gambling Yield.
Why Online operators pay more than double the rates of land-based operators is open to conjecture. It might be that Online venues are more visited these days than land-based venues.
How Does The Levy Impact Players
On the face of it, the levy does not impact players directly. Gambling operators will pay a business levy based on gross gaming revenue. That means the tax is payable on revenues after all expenses are deducted.
We believe this extra tax will further modify the behaviour of gambling operations in the UK. We have seen this already in the taxes that are levied on bonuses. This though is a tax on profits and not on bonuses.
Will it make sense then for Gambling businesses to up bonuses again? Given that it’s a 1% tax on profits for online operators, it is less than the bonus tax, so we don’t think we will see a resurgence of bonuses in the UK market.
Gambling Levy Impacts
The UK Gambling market is a highly regulated one with some of the best safeguards in place to protect players. It is also in danger of becoming dull with fewer bonuses and promotions on offer.
This means online players will look at unlicensed venues that are still taking play from players in the UK as they can still offer aggressive bonuses.
The Head of the UKGC recently dismissed these dangers but it is something that is continuing to grow and is likely to grow further given the increasingly burdensome tax regime around gambling in the UK.
In short, we believe that there will be less choice of venues and promotions in the UK and this will drive players to seek alternative venues. That is not a good thing for players.
We understand the reasoning for the levy, what then happens to the funds raised via the fines that the UKGC dishes out to operators? We know that the funds raised from fines go directly to the UK treasury.
A portion of those fines are supposed to go to organizations that deal with problem gambling, it seems now there is an additional tax for this specific purpose.
Tell us what you think in the comments below.