Chancellor of the Exchequer Philip Hammond has just announced in his Budget speech an increase in remote gaming duty from 15% to 21% with effect from October 2019 to fund the loss of revenue as maximum FOBT stakes reduce to £2, implying that the FOBT stake reduction will not take place until then.
1 Remote gaming duty
The Budget 2018 policy paper confirms our above interpretation of the Chancellor’s announcement in relation to the date of reduction of FOBT stakes, stating at paragraph 4.16 (with our emphasis in bold):
Remote Gaming Duty – As announced in May 2018, in order to ensure funding for public services is maintained following the implementation of a £2 maximum stake on B2 machine games, the rate of Remote Gaming Duty will increase to 21%. Both the reduction in maximum stake and increased duty rate will come into effect in October 2019.
The remote gaming duty increase policy paper can be downloaded below, as too can:
- a CasinoBeats.com article entitled “Industry fears realised as UK online gaming tax hike confirmed” and
- an SBC News article entitled “You might as well shout at the moon – Hammond set to issue RGD Hike”,
each of which refer to David Clifton’s “UK Tax Hike” panel session at the Casino Beats Summit last month, a video of which can be accessed here. One of David’s panellists, James Myles, an analyst at Eta Delta, has called the RGD increase “a further measure that will destroy competition and force consolidation”. He is quoted in another CasinoBeats.com article as saying:
That the sector ‘can afford it’ is a ridiculous justification. The government has created its own FOBT crisis, by relying upon then destroying this revenue source to the Treasury’s coffers without contingency. The RGA [Remote Gambling Association] seems comfortable enough with it because it primarily represents the companies in the sector that actually can adjust for it. It is terrible news for small operators and those with a small GB market share.
2 Gaming duty
The Budget 2018 policy paper also states (at paragraph 4.16) as follows in relation to gaming duty paid on the gross gaming yield at land-based casinos in the UK:
Gaming duty accounting periods and bands – As announced in HMRC’s consultation response in July 2018, the government will legislate in Finance Bill 2018-19 to remove the requirement for casinos to pay gaming duty on account and to allow the carry forward of losses between accounting periods. The return period for gaming duty will remain 6 months. The bands to determine payment of gaming duty will be frozen from April 2019, while the changes to gaming duty accounting periods are implemented.
3 FOBT stake reduction and remote gaming duty increase brought forward to April 2019
On 14 November 2018 the Government announced that:
- it is bringing forward the date of implementation of the FOBT maximum stake reduction (from £100 to £2) from October 2019 to April 2019 and
- the increase in the rate of remote gaming duty from 15% to 21% will also be brought forward from October 2019 to April 2019.