In the age of president Donald Trump 2.0 it seems that contentious word “taxes” has been banned from the Anglo-sphere. Instead we’re left with “tariffs” and “mandatory levies”.
Will somebody out there please explain the difference?
Following their recent swingeing budget that seeks to plug a putative £25 billion (US$31.72bn) shortfall in the nation’s finances, Britain’s new Labour administration–against all expectations–decided against formally increasing “taxes” on the country’s lucrative gambling industry — an industry, it should be emphasised, that leads the world in digital online technology, directly employs over 100,000 people in predominantly high-paying jobs and already contributes some £4.5 billion annually to the exchequer (US$5.71bn).
Attack
But now, in what can only be termed a performative runaround, the government–already under concerted attack for raising national insurance contributions and binning energy discounts for pensioners–has decided to impose a new mandatory levy on gambling operators, which aims to raise over £100 million (US$126.91m) annually for the research, prevention, and treatment of gambling harm.
It has also confirmed new stake limits for online slots.
The measures will take effect on April 6 in the New Year.
But here’s the rub. Much like many of the government’s other ill-thought-out fiscal moves, the new imposition will probably raise a lot less money than has been tabled.
Addiction
Because, quite simply, the UK gambling industry already contributes tens of millions of pounds to charities and programmes tackling the impacts of extreme betting addiction.
While it officially supports the mandatory levy, the UK gambling industry’s representative Betting and Gaming Council (BGC) was quick to remind lawmakers: “BGC members voluntarily contributed over £170 million (US$215.75m) over the last four-years to tackle problem gambling and gambling-related harm.
Under the new levy, contribution rates will range from 0.1 percent to a maximum of 1.1 percent of Gross Gambling Yield (GGY), with online operators and software suppliers facing the steepest charge.
Impacts
According to the Department for Culture, Media and Sport, who oversee the gambling industry, the levy will apply to all betting activity – but at different levels to “ensure impacts are proportionate”.
“It also takes into account varying operational costs and the “levels of harmful gambling associated with different gambling activities.”
Family Entertainment Centres, pool betting licences and all machine technical licences will pay 0.1 percent of their GGY.
On-course bookmakers, Adult Gaming Centres and land-based bingo halls will be charged double this amount.
Retail casinos and high street betting shops will pay half a percent.
And iGaming operators and licensees will pay the biggest levy of all — 1.1 percent of GGY.
Equally significantly, stakes on online slots will be capped at £5-a-spin for players aged over 25-years-old and £2-a-spin for those aged 18- to 24-years.
Prevention
Under the new levy, half of the money raised will fund NHS treatment services, 30 percent will go towards prevention initiatives and 20 percent will be spent on research.
Zoë Osmond, CEO of the GambleAware charity, affirmed: “This represents a significant step towards protecting people from gambling harm.
“The levy is also a crucial step towards ensuring continued support through a statutory system and is something we have been calling for since 2017.”
Putting the new levy into a wider perspective, Jamie Walters, CEO of gaming data crunchers QiH Group, told iGF: “While levies and taxes can sometimes be viewed as a burden, the truth is that most responsible gambling companies have already been making this contribution to research and harm prevention as they see it as sensible and worthwhile.
Mandatory
“All that is happening now is a switch from voluntary to mandatory, and the rate is not punitively high.”
Added the BGC’s Grainne Hurst: “Ministers must not lose sight of the fact that the vast majority of the 22.5 million people who enjoy a bet each month, on the lottery, in bookmakers, casinos, bingo halls and online, do so safely, while the most recent NHS Health Survey for England estimated that just 0.4 percent of the adult population are problem gamblers.
“The tone of this announcement suggests the government is at risk of losing perspective of these facts while simply dancing to the tune of anti-gambling prohibitionists, which serves no one.”
Additional Reporting By Lauren Harrison
