UK Confirms Online Gambling Sites 2019 Tax Hike

UKGC to cover lower FOBT stakes with higher online gambling taxes.

UKGC to cover Lower FOBT Stakes with Higher Online Gambling TaxesFor the last five years, the United Kingdom has been leading the global charge in terms of online gambling regulation. Every move, every amendment, every policy underwritten, sets a new standard for other jurisdictions to observe and potentially follow. Licensees have been met with new measures and restrictions every year since the UK first adopted mandatory licensing in 2014.

Some of the latest alterations to the UK’s legislative gambling structure include a reduction in the maximum wager allowed on fixed odds betting terminals (FOBTs), and more recently, the announcement of UK online gambling sites 2019 tax hike. Separately, these are sweeping blows to the nation’s land-based and online casino industry. Together, they are the perfect solution to the UK’s gambling issues, reducing social harm while sustaining coffer liquidity.

Supplementing FOBT Revenue with Online Gambling Taxes

Following more than a year of debate and vehement opposition from gambling retailers, the UK government announced in May 2018 that it would be decreasing the maximum wager on FOBTs from the current £100 per play, to just £2 per play. High street bookmakers were (and still are) furious, as at least half their revenue comes from FOBTs.

As a direct result, when the new rules go into effect next year, much of the UK government’s revenue from FOBTs is sure to decline as well. Unlike the gaming industry, however, the government has ways to make up for it—like hitting the remote gambling industry with increased duties.

UK Confirms Online Gambling Sites 2019 Tax Hike

Back in May, the government announced that it would likely make up the projected loss of revenue from lower FOBT stakes by applying a higher tax to its online gambling licensees. It was speculated that the existing 15% tax rate would increase to somewhere between 20% and 25%.

Last week, the UK government published a Policy Paper announcing the decision of UK Chancellor of the Exchequer Phillip Green. The Chancellor has decided to invoke a 21% remote gaming duty (RGD), to go into effect on October 1, 2019—the same day the new FOBT max stakes restriction takes effect.

Precarious Future of UK Online Gambling Operators

When the country first enforced mandatory licensing for any remote gambling operator that wished to accept UK players—a license that came with a 15% tax on profits—it threw the industry into a panic. Many operators chose to flee the region. Most of the big names chose to stay and ride out the storm. The end result was a host of mergers and acquisitions, consolidating businesses and costs, while many small-time companies simply faded into extinction.

Now, there’s another fork in the road for online gambling sites. 2019 will be a turning point for all involved in the UK’s gaming market. No doubt, mergers, acquisitions and bankruptcies will be on the menu once more as they face even higher online gambling taxes.

The real question, from the sizable community of FOBT and online gambling enthusiasts out there, is whether the changes will have any impact on them—the players. As the laws are presented, no. It’s only the operators that must deal with the new restrictions. However, those operators could very well choose to pass on the higher costs to their customers by way of less favorable odds.

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