When the UK chancellor, Rachel Reeves, revealed her Autumn Budget, there was some surprise when she refused to increase taxes on profits for gambling operators.
But at the same time, there was a feeling that if she hasn’t got us now, then it’s only a matter of time before she does.
And perhaps that mindset has come home to roost, with the news that the UK government is planning to introduce a mandatory levy on all gambling firms operating on domestic soil, which could raise in excess of £100 million.
The 1% Club
Under current UK law, bookmakers and betting sites have a voluntary levy that they can pay into. The amount donated is at their discretion and is used to fund research into – and treatment of – problem gambling behaviours.
But the voluntary nature of the levy has bred contempt amongst some operators, with annual payments of as little as £1 being paid into the fund by some firms.
And so the government is planning to overhaul the system, with a statutory, mandatory levy of 1% of annual gross gambling yield to be paid by UK licensed firms.
In 2023, the bookies made a collective £10.9 billion from punters in the UK; 1% of that would net £109 million for problem gambling research, education and treatment.
The Gambling White Paper, finally published in April 2023, was a top-down look at the sector. One of its recommendations was the imposition of a statutory gambling levy, which would replace the voluntary payments scheme in place before.
A consultation period, with the working title of ‘the structure, distribution and governance of the statutory levy on gambling operators’, was launched in October 2023 and ran through until the December of that year.
Once the results had been concluded, it’s thought that the Conservative Party were planning a statutory levy of 0.4% for land-based operators, such as high street bookmakers, and those with higher costs. As part of the plans, firms with an annual profit of less than £500,000 would have been exempt.
The election in July prevented the Tories from acting upon the findings of the consultation, but the new government formed by the Labour Party has now had time to consider the viability of a statutory levy.
And according to sources, that could be announced as early as this week, with the mandatory levy introduced from the start of the new financial year in April 2025.
Greater Clarity
As part of an overhaul of how gambling-related harms are treated in the UK, a number of new specialist addiction clinics will be built by the NHS. Some of the money raised by the statutory levy will go towards their operation.
Charities and counselling services will also be handed funds to bolster their provision, although how much of the levy – if any – will be paid to the leading gambling charity, GambleAware, remains to be seen.
They have been calling for a compulsory 1% industry levy since as far back as 2022, but under the new government scheme, they could be squeezed out of the queue of recipients.
Under the voluntary levy, they are paid around £50 million a year; money that is pumped into problem gambling research and treatments. But some believe that charities like GambleAware are too closely associated with the industry.
And so it’s thought that the new levy will be managed by the NHS, who will commission where the funding goes. Much of it will likely be spread to UK Research and Innovation (UKRI) and the government’s own Office for Health Improvement and Disparities (OHID).
GambleAware, and ‘third party’ local community firms that provide treatment and support to as many as 90% of individuals that need it, may end up missing out… which has led to some organisations to call for ‘greater clarity’ on how any levy funds would be used.
The Betting and Gaming Council (BGC) had previously been in support of the creation of a mandatory levy. But fears of how the money will be used have caused them to make U-turn on their stance.
A spokesperson for the group commented:
“The BGC previously proposed a mandatory levy and we welcomed the government’s announcement for a new system of payments with continued independence of funding allocation.
“The BGC remains concerned that there should be a sliding scale for land-based businesses that have much higher fixed costs, such as staff and premises, and that funding for longstanding, expert providers of research, prevention and treatment services in the third sector is protected.”