HMRC Gambling Tax Report Shows Online Remote Gaming Duty Exceeds General & Machine Betting

The latest report from Her Majesty’s Revenue and Customs about the statistics of duties generated by the gambling industry has been published.

It suggests that there has been something of a chance in the more dominant parts of the gambling industry, with the likes of Machine Games Duty down at the same time as Remote Gaming Duty has gone up.

The report looks into the tax statistics for betting and gaming over the six month period between April and September 2019. It also compared those statistics to the statistics during the same period of April and September 2018 in order to make some conclusions about the way that the gambling industry is heading.

There have been numerous changes in the course of twelve months, of course, not the least of which is the limit to the maximum stake on Fixed Odds Betting Terminals.

The report looks at the following seven tax verticals:

• Bingo Duty
• Gaming Duty
• General Betting Duty
• Lottery Duty
• Machine Games Duty
• Pool Betting Duty
• Remote Gaming Duty

Remote Gaming Duty Is Up

One of the first headlines things to emerge from the report is the fact that the tax collected on Remote Gaming Duty is up 26%, reaching a figure £330 million.

The big question is where, exactly, that rise has come from. One of the most obvious reasons for the increase is the fact that the Duty was increased  on the 1st of April 2019 in order to cover the shortfall that the government was going to suffer because of the cut to the maximum stake on Fixed Odds Betting Terminals from £100 to £2.

Even so, the report suggests that that is only ‘potentially’ the reason for the increase as opposed to definitely. The rate was moved from 15% to 21%, but is 6% enough to cover a £330 million rise over the same period last year? It’s likely that it’s partly to do with that and partly to do with an increase in the amount of online betting being done by people.

When the FOBT maximum stake came into effect it’s likely that people turned to betting online instead, so the combination of these two things is likely to explain a £330 million rise.

RGD Worth More Than Machine & General Betting

The fascinating thing about the increase to the Remote Gaming Duty vertical is that it means it is now ahead of both the Machine Betting Duty and the General Betting Duty.

That is, at least in part, because the Machine Betting Duty has decreased at the same time as the RGD has increased. It is suggestive of people switching their personal betting habits and placing bets online more regularly. The limit put in place on FOBTs and their maximum stake is at least partly to blame for this as fewer people are using the machines.

Yet that alone isn’t the full story. William Hill alone closed 700 shops in the wake of the government’s decision on Fixed Odds Betting Terminals, with other bookmakers closing a similar amount. That meant that there have been fewer shops open in which people can play on the machines even if they wanted to, so that obviously has an impact on things.

It’s also likely that the prolonged campaign against FOBTs by charities and campaigners meant that fewer people wanted to play on them, also reducing the amount of money being spend on them.

Remote Gaming Duty was responsible for 23% of the industry receipts from April to September 2019, which compares favourably to the 18% taken from Machine Betting Duty and the 19% from General Betting. With HMRC only having tracked and recorded RGD Since April of 2015, it really underlines just how quickly that side of the industry has grown and how significant that is.

Betting Duties Expected To Decrease Overall

Whilst there was an increase to the Remote Gaming Duty on this time last year, the financial comparatives overall are expected to show a decrease in Betting Duties of around 11%. It is anticipated that it will fall to £274 million, with the FIFA World Cup that took place in Russia in the summer of 2018 being the main reason for that.

Whenever a major football tournament takes place there is a large jump in the amount of bets placed, not least of all because even people that don’t tend to like football tune in for something like the World Cup and place a few bets on it. It’s one of the things that the betting industry has got used to, but it still shows up in year-on-year accounts.

It means that there’s nothing particular to worry about and it’s likely to go back up after next year’s UEFA European Championship.

The Lottery Continues To Do Well

Whilst the rest of the industry has ups and downs of its own to cope with, the Lottery Duty continues to do well. In fact, the ‘provisional total’ for the month of September 2019 shows the second-highest generation of money since the National Lottery was launched in 1994.

This is almost certainly because both the Lotto and the EuroMillions jackpots rolled over numerous times, meaning that the jackpots were huge for both in September.

The £471 million that has been tracked for the Lottery Duty is the equivalent of 32% of industry receipts. It’s little wonder, therefore, that there is no real concern over the health of the Lottery. Whilst there’s obviously no guarantee that jackpots will continue to rollover and provide the Lottery with a constant attraction, people are always more likely to turn to gambling when their personal situations aren’t good.

The uncertainty imposed on the nation by Brexit and the move to form a new government is unlikely to see that situation change any time soon.

One thing that could affect Lottery revenues in future years are the proposals to raise the minimum age from 16 to 18.  If this does happen it will obviously remove a lot of players from the system.

Licensees Reminded Of Responsibilities

Other regulatory updates also occurred during the start of November, with the United Kingdom Gambling Commission choosing to remind licensees that they have responsibilities when it comes to offering transparent reporting of their funding of harm prevention and treatment.

A portion of gambling tax is paid towards the research and prevention of gambling harm, which has been made part of the regulatory agenda of the UKGC for 2020.

Given that problem gambling is in the news seemingly every week, it’s no surprise that the Gambling Commission has used this opportunity to remind those with a licence that they need to ensure they’re doing all they can to meet the voluntary arrangements to meet the target set by the National Strategy to Reduce Gambling Harms.