UK Online Gaming Tax Could Increase in 2019

UK Online Gaming Tax Could Increase in 2019 August 1, 2018 Jack Jakob
July 23, 2018 by Jack Jakob

gambling taxPlans by the government of the United Kingdom have potentially been set in place to increase the online gaming tax in 2019. The move, which will no doubt upset online operators, comes in response to several critics who stated that more needs to be done to pay for problem gamblers’ recovery in the UK.

As things stand at the moment, the point-of-consumption (POC) tax for the online gaming world is 15%. The changes that the government is looking to enforce on this will hopefully satisfy the many people who have said that the reduction of maximum bets on fixed odds betting terminals isn’t going to be enough. Furthermore, that reduction won’t take place until 2020.

These POC taxes first became a part of the UK back in 2014. At this time, the government initiated the law as a way for British citizens to be taxed for using online casinos that may not be based in the area, but still receive revenue from it. This includes both online casinos and sportsbooks that provide their services to the UK market, even if their headquarters are based out of another location. Sometimes, British companies opt to set up their business offshore in places such as Gibraltar due to the cheaper operating costs and lower revenue taxes.

This has already brought several online gaming platforms to complain about the tax, stating that it is forcing them to raise their prices for items and for comp limits. Yet, even with this backlash, the POC taxes remain as a way for the UK government to level the playing field for every gaming company operating in the country. This sort of tax is also currently being implemented within Australia at the moment.

So, How Come There’s an Increase Coming?

There has been a bit of a backlash against the UK government already, regarding its planned decision to increase POC taxes. Some critics have said that the only reason it has done this is because it is worried about the reduction in FOBT stakes affecting the budget. Reducing the maximum stakes on these to £2 from £100 is a somewhat huge drop, especially where tax income is concerned. Additionally, gambling companies are unhappy about the fact that they’re being smacked with two big impacts – one from the reduction of maximum wagers on FOBTs in 2020 and another from the increase in POC tax.

However, no specific dates and times have been set for either of these changes. The Treasury is looking to increase the POC tax in early 2019, while moving the FOBT decrease to around April of 2020. The reason given for the long time-period that this will take is that the government doesn’t want these moves to have such a huge impact on the gambling industry all at once. Land-based betting shops have voiced their concerns over potentially being forced to close, leaving many people without jobs. Naturally, this could have a vast effect on both the gaming industry and the UK unemployment rate.