Chancellor Rachel Reeves has resisted heavy lobbying from betting firms and pressed ahead with a tax raid on internet gaming firms
Online betting firms will be hit with a tax hike to tackle problem gambling – while bingo halls have been given a boost.
Chancellor Rachel Reeves confirmed that remote gaming duty soaring from 21% to 40% from April next year. It is already a biggest earner for the Treasury and generates £1billion a year.
The Office for Budget Responsibility says more than doubling the rate will bring in an extra £1.1billion a year by 2029/30. Think tank the IPPR had recommended increasing the duty to 50%.
The Chancellor also said that, from April 2027, a new rate of general betting duty will added at 25% to online gambling. She insisted that horse racing have been protected from the shake-up, with remote bets on the horses excluded from the new 25% remote Betting Rate.
And bingo halls will benefit after Ms Reeves said the 10% duty that applies to the game being ditched.
Former Labour PM Gordon Brown was among those urging Ms Reeves to target the “massively undertaxed profits”. He said an increased levy could raise £3.2billion to to lift 500,000 children out of poverty.
The Treasury said it was “raising taxes on online gambling – which has grown substantially over the years, alongside gambling harms – while protecting face-to-face gambling, from bingo halls to horse racing.”
It went on: “Online gambling has grown and, while many people in the UK enjoy it in moderation, for others it can cause harm.”
However, the OBR forecast that players would pay the price for the hike in online taxes, as operatoers pass through around 90% of the duty increases through higher prices and reduced payouts.
Dame Meg Hillier, chair of the Treasury Select Committee, said: “The gambling sector’s scaremongering has failed. The Chancellor has made the right decision in agreeing with my Committee that the tax rate for remote betting, including highly addictive casino games, should reflect the harm it inflicts.
“Some parts of the gambling industry, such as racecourses and bingo halls, make a cultural contribution to our country. This is not the case, though, for online slots and other remote gaming which can quickly drain the bank balances of vulnerable people after just a few clicks of a button on a phone. It’s reassuring to see that the Chancellor agrees with us on this and I look forward to discussing it further with her when she appears in front of us in December.”
Adam Rivers, managing director and global head of betting and gaming practice at Alvarez and Marsal, said: “While this is painful for the online sector, not all business models have fared badly in this Budget. Scrapping bingo duty and holding machine gaming duty steady gives land-based bingo operators some breathing space, helping venues that still matter to many communities stay on the high street and supporting the wider hospitality sector.”
Brant Dunshea, acting chief executive of the British Horseracing Authority, said: “Today’s welcome outcome demonstrates that the Chancellor has listened to our concerns and rightly recognised that racing is a unique national asset – culturally, socially and economically – and we welcome this support.
“Betting on racing is an integral part of the enjoyment of our sport, and maintaining the rate of horserace betting duties is an important step by the Government to help preserve revenue streams and protect the 85,000 jobs supported by the racing across the country.”
