Opinion: There is only so much squeezing the gambling sector can take
eGaming Review editor Tom Washington argues that the UK Treasury's thirst for gambling taxes mean it's time for the industry to push back
Eliciting sympathy for the gambling industry is no easy task. For years the bookies have played the role of pantomime villain in Britain, but the triple-punch tax grab by the UK government on Wednesday was enough to make the most cynical punter offer a nod of commiseration.
If confirmation of the broad 15% gross gaming online revenue tax was a disappointment and the online horse racing levy a setback then the FOBT tax hike was a disaster. At a stroke the UK government wiped over £20m from the land-based profits of Ladbrokes and William Hill with millions more to come once the new online taxes kick in next year.
The industry has so far been fairly restrained in its response, with the most aggressive language coming from trade bodies such as the RGA and the GBGA. But this felt like a turning point. The constant pressure on the industry is becoming something that’s harder to bear and it feels like the sector needs to start pushing back.
The UK gambling industry is not an endless pot of money the Treasury can keep dipping in to at will. Its growth is a success story we should celebrate as a modern tech-driven business that is a true world beater. And it’s not just thousands of jobs the UK risks losing, or its position as the centre of the global online gambling world, it’s the safety of the consumers it wants to protect.
Threats of consumers moving to unregulated operators are not idle. And the UK would be wise to learn the lessons from regulated Europe where prohibitive tax rates have not only prevented operators from making money. Along with a restricted product suite, they have created a substantial and thriving black market.
This industry does not fear regulation, it welcomes it. And it’s not afraid of paying its fair share in tax, despite what many would have you believe. But if the government truly wants gambling to become part of the wider leisure and entertainment sector, with happy and safe consumers, then it must stop treating gambling like a vice.
Indeed the Treasury should also stop acting like a vice itself and squeezing the sector until, as Ladbrokes said yesterday, the pips start to squeak. A tax rate of 15% is certainly not unreasonable when compared with other regulated nations in Europe, but are those regimes providing the right environment for business growth, consumer protection and, most importantly, long-term sustainability? And is it really in the best interests of consumers?
Gambling is an integral part of British culture, and the whole nation will grind to a halt in a couple of weeks to watch the Grand National. Let’s hope Wednesday’s tax raid is the end and not the beginning of the squeeze on operators or we could soon see the industry start coming to a standstill too. And that’s not good for anyone.