1% Increase in Tax Rate For UK Online Casinos

British gambling operators will need to pay an extra 1% tax of their Gross Gaming Revenue (GGR) to the National Health Service (NHS). This amount corresponds to approximately £100 million (NZ$ 207m) per year. This agency is said to use the money to fund research, prevention, and treatment of gambling addictions. 

The measure will move the voluntary choice of gambling operators to donate money to an obligation. Although a voluntary levy currently exists, the government’s Department for Culture, Media and Sport (DCMS) said in a statement on Tuesday that some operators are paying as little as £1 for research, prevention and treatment.

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Polluter Pays Tax

The mandatory tax will fairly rectify the current differences that gambling companies pay, according to DCMS. In the White Paper, this levy was referred to as a ‘polluter pays’ tax, although no specific percentage was stated. Secretary for Culture Lucy Frazer says the following about the proposed changes:

“We are taking the next step in our plan to protect those most at risk of gambling harm with a new levy on gambling operators to pay for treatment and research. All gambling operators will have to pay their share and this consultation is a chance for the industry, doctors, and people who have experienced gambling harm and the wider public to have their say on how the proposed levy on gambling operators should work. The introduction of this levy will strengthen the safety net and help deliver our long-term plan to build stronger communities, whilst allowing millions of people to continue gambling safely.”

Lucy Frazer, DCMS

In addition to how polluters pay taxes, the White Paper also sets out other measures that online casinos in the UK must adhere to to combat or prevent gambling-related harm. The white paper also provides financial risk controls, betting limits for online slots, and strict controls on the marketing of bonuses.

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Land-Based Operators Exempted

The levy of 1% of gross revenues only applies to online casinos and online bookmakers offering their services on the internet. Betting offices and land-based casinos will be subject to a lower tax rate; these companies will have to pay a mandatory contribution of 0.4% of the GGR. This lower percentage is said to be because technology has shifted the gambling landscape from land-based venues to online platforms. Importantly, online casinos are said to cause more gambling-related damage than gambling offerings as available in land-based settings. In addition to the mandatory payment, the gambling companies will no longer have a say in how the money is spent. The UK Gambling Commission (UKGC) will distribute the money directly to the NHS and UK Research and Innovation.

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