Gambling industry welcomes tax stability as UK budget avoids hikes

David Gravel October 31, 2024

SiGMA news

The UK budget announcement on October 30, 2024, delivered a pivotal outcome for the gambling and iGaming industry. Operators had faced months of speculation over potential tax hikes, fuelled by think tanks and public debate. Key voices, including the Social Market Foundation (SMF) and Institute for Public Policy Research (IPPR), suggested raising Remote Gaming Duty (RGD) by up to 50 percent to align with countries with higher gambling tax rates, such as the Netherlands, where recent tax increases will reach 37.8 percent by 2026.

Anticipation fuels market volatility

In the lead-up to the budget, anticipation of significant tax changes led to volatile share prices for top operators like Entain, Flutter, 888 Holdings, and Rank Group. Each saw sharp declines as investor concerns grew. However, following Chancellor Rachel Reeves’ announcement to maintain current tax rates, these stocks rebounded as investor confidence returned, reflecting the industry’s renewed sense of stability. For the sector, this stability provides a reprieve, allowing companies to refocus on investments in operational growth and social responsibility initiatives without the strain of increased taxes. Industry leaders, including the Betting and Gaming Council (BGC), expressed relief, stating that the decision supports job retention and enhances the industry’s global competitiveness.

Industry relief and renewed focus on growth

Operators who had previously worried about tax increases in online gaming found encouragement in the absence of new fiscal pressures, particularly in the current economic climate. This decision not only stabilised finances but also reinvigorated share values, with companies recovering after pre-budget declines. In a public statement, BGC CEO Grainne Hurst praised the tax decision as vital for sustaining jobs and investments, especially in safer gambling initiatives. She reiterated that maintaining current tax levels allows UK-based operators to remain globally competitive while continuing to invest in responsible gambling efforts. While the industry has welcomed the tax decision, a cautious outlook remains. The BGC, alongside other industry voices, highlighted ongoing concerns about potential future adjustments. As public discourse on gambling-related harm grows, pressure mounts for stricter regulatory policies.

Industry’s response to the budget

Led by CEO Grainne Hurst, the BGC positioned the tax decision as a key stabiliser. Hurst stated, “We welcome today’s budget and its commitment to not increase gambling duties on the regulated betting and gaming sector. “Government has listened to the BGC and our members, got the balance right, and rejected calls from anti-gambling prohibitionists seeking to threaten jobs and growth. “While there have been no rises in gambling duties, we will study the impact that increased employers’ National Insurance contributions will have on BGC members, particularly smaller operators like independent bookmakers and land-based leisure operators, like casinos. “Each month, around 22.5 million people in Britain enjoy a bet, on the lottery, in bookmakers, casinos, bingo halls and online, and the overwhelming majority do so safely and responsibly. The most recent NHS Health Survey for England estimated that 0.4 percent of the adult population are problem gamblers.” Post-budget, gambling stocks experienced a bounce back, reflecting investor confidence after months of speculation. Major firms like Entain, Flutter, Rank Group, and 888 Holdings saw stabilisation, which market analysts attribute to renewed trust in regulatory consistency.

Missed opportunities for reform

Public health advocates have voiced disappointment over the budget’s missed opportunity to address gambling-related harms with additional funding. Many reform groups continue to urge a mandatory levy to fund addiction services and support public health. Groups such as GambleAware estimate that a 1 percent mandatory levy would raise £140 million annually to support treatment services for gambling addiction. Critics argue that the current reliance on voluntary contributions does not address public health needs consistently.

Timeline of key events

In the months leading up to the budget, intense discussions and speculation about potential tax hikes dominated the narrative. Think tanks like SMF and IPPR proposed significant increases, including a 50 percent RGD rate from IPPR and a 42 percent rate from SMF. Additionally, there were proposals to double the General Betting Duty (GBD) from 15 percent to 30 percent, a change that would significantly affect traditional bookmakers.

SMF and IPPR framed these increases as essential to support public health initiatives. These proposals sparked debate within Parliament, the public, and industry stakeholders. Supporters of higher taxes argued such measures would help address gambling-related harms, while opponents countered they would undermine industry stability and competitiveness. Concerns also arose over job losses and potential effects on local economies that rely on gambling and horse racing.

In response to mounting pressure, the BGC and other industry leaders advocated for a proactive approach to responsible gambling. The BGC stressed the need for voluntary contributions from operators to address gambling-related harm, underscoring the industry’s dedication to social responsibility without statutory intervention. Industry leaders argued that a voluntary model offers the flexibility needed to avoid a “one-size-fits-all” approach, which may disproportionately impact smaller operators and high-street bookmakers.

Why the budget outcome matters

The budget’s decision to hold steady on gambling taxes is critical for the economic stability of the UK gambling sector. Without new fiscal burdens, operators can make long-term investments without the immediate threat of increased taxes. This stability is essential for maintaining competitiveness in the global market. The UK’s steady rates could make it a more attractive base for operators compared to high-tax jurisdictions. For example, the Netherlands is implementing a phased tax increase, with rates rising from 30.5 percent to 34.2 percent in January 2025, then up to 37.8 percent by 2026.

This tax stability also provides the industry with an opportunity to reinforce its commitment to safer gambling practices. With fewer financial constraints, operators can expand programs, such as voluntary funding for gambling harm prevention. The BGC and other important stakeholders have shown plans to enhance their backing for responsible gaming. This approach aligns industry actions with public expectations and addresses common criticisms about gambling-related harms.

Avoiding substantial tax hikes helps the industry counter black-market risks, a significant concern before the budget. Higher taxes might have pushed consumers towards unregulated platforms, where protections are limited. By maintaining current tax levels, regulated operators can focus resources on consumer protection and responsible gambling. This approach not only addresses public concerns but also strengthens the industry’s argument against harsher regulatory measures that could inadvertently push consumers towards the black market.

Future outlook and what’s next

Despite the budget’s tax stability, the UK gambling industry faces ongoing regulatory uncertainties. Public health advocates continue to call for a mandatory levy, seeing it as essential to supporting those affected by gambling-related harm. Future regulatory changes, such as stricter affordability checks or tighter advertising rules, could significantly affect industry operations and profitability. Although the current budget provides relief, speculation over future fiscal measures remains. This reprieve does not eliminate the possibility of tax increases in upcoming budgets, especially as fiscal demands grow and public sentiment increasingly calls for accountability in the sector. Industry leaders, particularly within the , have underscored the need for a stable regulatory environment to support growth and responsible business planning. The BGC cautiously supports statutory levies only if they direct the funds toward third-sector charities for gambling harm and do not create excessive burdens on operators. This balanced approach seeks to enable responsible gambling initiatives and support third-sector organisations, aligning the industry’s goals with broader community needs.