Free Bet Tax Looming in UK Operators' FuturePublished March 17, 2016 by Florin P
UK licensed operators brace for a new free bet tax, set to come into effect in August 2017 if approved.
High street bookies in United Kingdom were expecting a new increase in the Machine Games Duty on Wednesday. However, the UK Chancellor George Osborne made a different announcement about a free bet tax that operators licensed in United Kingdom will have to pay from August 1, 2017.
This proposal will be subject to debate and if it passes, online casinos and bingo rooms will be subject to a 15% general betting duty on bets which are free or discounted. Until now, they were exempted from the highly criticized 15% point of consumption tax introduced in the second half of 2014. Internet gambling operators will have more than one year to prepare for the new tax, so there is time to tweak their free bets.
No Distinction Between Casino, Bingo and Sports Betting
The new tax imposed on free bet offers will level the playing field between sports betting bookmakers, online casinos and bingo parlors. The former were already paying the 15% POCT applying on all the online gambling revenue generated from players residing in United Kingdom. Chancellor George Osborne suggested that the new tax will only close the loopholes, without hurting gambling operators too much.
The latest budget proposal was not celebrated by casinos, but their stocks responded positively to the news. Shareholders were expecting harsher measures, such as further restrictions of online advertising or higher taxes, so the free bet tax came as a relief. One and a half years ago, when the 15% point of consumption tax was introduced, the profits of UK operators plummeted and some even recorded losses.
Nothing is Written in Stone
The Chancellor’s proposal needs to be approved before casino and bingo operators in the United Kingdom will actually have to pay the free bet tax. Unlikely as it seems, there is a possibility for this new tax not to be implemented and the free bet offers to be unaffected by this motion - only time will tell.