Rachel Reeves, the UK’s Chancellor of the Exchequer, is set to raise the General Betting Duty from 15% to 30% in her Autumn Budget later this month.
Amid this, a report by the country’s Betting and Gaming Council (BGC) has stated that European countries with a higher tax on gambling and gaming markets are likely to see a surge in black market activity.
In the UK, 5% of all online betting and gaming takes place on unlicensed black market websites. This has risen from 3.3% in 2021.
Higher tax rates are also impacting France, Sweden and the Netherlands, which all have over 30% of online betting taking place on the black market.
“Britain has one of the safest gambling markets in Europe but if the Treasury isn’t careful, we could quickly end up like France or Sweden, with huge black markets contributing nothing in tax, offering zero player protection, and providing no funding for sport or the economy,” said Grainne Hurst, CEO of the Betting and Gaming Council.
“Well-balanced regulation and fair taxes protect players, raise more revenue for the Treasury, and support thousands of jobs. Unlicensed operators do none of those things.”
This rise has seen several gaming markets in those countries moving offshore, something that could happen in the UK.
More UK gambling firms could move offshore amid tax rise
In comments sent to ReadWrite, Chief Gaming Officer at Casino.org, Alexander Korsager, offered his perspective on the potential tax rise in the UK: “We fully support the gambling industry’s contribution to the UK economy, but we have serious concerns about the potential exodus of companies seeking more tax-friendly markets.
“Countries like Malta and Gibraltar, with significantly lower tax rates (often around 1% to 5%), have become attractive alternatives for many operators. In contrast, the UK currently pays 21%, which could double in the budget announcement later this month.”
Last week, however, a report was published by the Treasury Committee stating that the government must not bow down to the scaremongering from the gambling industry.
This report came amid the industry claiming that Gambling causes “no social ills”, while going on to examine how forays into black market gambling can be avoided.
“Online betting games are extracting huge amounts of money from people who have been funnelled into the most addictive, harmful corners of the industry via their love of sports, or the occasional game of bingo,” said a comment from the chair.
“We are urging the Government not to cave in to industry scaremongering and to tax online betting games at a rate that reflects the level of harm they inflict.”
Featured image: Grok
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