A point of consumption tax on “remote gambling” (the political word for online or mobile) was introduced in December 2014 and set at 15%. This is the lowest rate of tax on any form of UK gambling.
Many Tories are unhappy with the remote gambling sector. Firstly, there is the barrage of texts and emails, which continued to be sent to a gambler who had committed suicide. Secondly, there is the incessant advertising of remote gambling on TV and at sporting events. Thirdly, some remote betting companies have been unwilling to contribute to funding horseracing through the “racing rights” initiative.
Most remote sites accessing UK gamblers are located offshore. They went there to avoid paying UK tax. They may have only limited direct employees in the UK and therefore have a negative economic impact on the UK.
Under the influence of the big bookies, the Gibraltar Betting and Gaming Association is trying to use EU law to avoid paying this 15% tax. The same bookies that want to avoid paying tax where they transact business, causing gambling harm, try to claim they are “responsible”!
An increase in remote gambling tax to 20% or 25% would help to redress the years that these sites avoided UK tax. It would also mean any revenue lost if the government clamped down on FOBTs, which are taxed at 25%, could be recouped.
With a reduced tax take from FOBTs, but an increased remote gambling tax, Mr. Osborne can easily support the urgently needed FOBT stake reduction from £100 to £2.
The Paddy Power scandal has exposed remote gambling profits from the proceeds of crime, FOBT profits from money laundering and profits from a FOBT addict who was working five jobs to feed the FOBTs and still ending up homeless!