Hammond said the Remote Gaming Duty (RGD), a tax applied to online casino revenue that’s different from the duty imposed on online sports betting, will rise from its current rate of 15% to 21% effective October 1, 2019.
The UK government had made clear its intentions to raise the RGD in order to offset the reduced tax revenue the government will reap via the FOBT stake cut. Hammond repeated this rationale in delivering Monday’s budget preview to parliament.
Industry reaction has so far been mixed, with some operators expressing relief that the increased rate wasn’t as high as it might have been. Others lamented the third online tax increase in the last four years, following the imposition of the 15% online point of consumption tax and the tax on free bets, while land-based operators have also seen a hike in Machine Games Duty.
Collectively, analysts estimated that an RGD hike to 20% would cost the industry up to £200m per year. The government’s own estimate of its 21% rate projects extra tax revenue of £130m in the 2019-2020 budget, rising to £255m in 2020-21, topping out at £290m in the 2023-24 budget.
The total sum raised by the boosted RGD is forecast to be £1.22b over the first five years, while the FOBT stake cut is expected to cost the government £1.15b over the same span. The government helpfully added that the impact of the changes on operators would be “negligible.”
Source: GMB / Calvin Ayre
