Gambling companies operating in the UK, like Flutter Entertainment and Entain, are breathing a sigh of relief today as the UK government’s newly released Autumn Budget leaves gambling tax rates untouched, staving off an anticipated hike that loomed over the industry. While the country’s gambling sector will likely see tax increases in the long term, companies will have more time to prepare.
A Sharp Increase Could Have Hurt the Regulated Market
The absence of tax increases in the Budget, announced by Chancellor Rachel Reeves, was a welcome windfall for UK operators and helped send their share prices surging again. Flutter and Entain saw their share prices return to close to their pre-11 October levels, currently resting at 234,51 and 767,20, respectively.
The gambling sector’s reaction was overwhelmingly positive, as many feared that the rumored Remote Gambling Duty (RGD) increase could double taxes on “higher harm” gaming products. RGD currently stands at 21% of operator profits and could have jumped to 50%, dealing a substantial blow to an industry already struggling with tightening regulations.
For now, this delay provides a much-needed respite. Flutter Chief Executive Peter Jackson, who slammed the proposed £3 billion tax hike in January, said fiscal policy stability was imperative for a healthy, competitive market. Other industry leaders agreed with this sentiment, pointing out that high taxes could lead to more severe competition and cause more harm than good.
The Government Is Eyeing Comprehensive Tax Reforms
The Autumn Budget notably included other tax changes like hikes in employer contributions and adjustments to capital gains taxes, but the gambling industry was conspicuously absent from this list. Reeves disclosed that the government plans to review its tax structure next year, potentially consolidating the three distinctive tax rates imposed on the gambling sector.
At present, operators pay 21% Remote Gambling Duty, 15% General Betting Duty on net stake receipts, and 15% Pool-Betting Duty on pool betting receipts. Reeves noted that such a consolidated approach would streamline tax liabilities and administrative burdens for the gambling sector while closing several existing loopholes and future-proofing the system.
The government will consult next year on proposals to bring remote gambling into a single tax rather than taxing it through a three-tax structure.
Rachel Reeves, Chancellor of the Exchequer
Industry insiders acknowledge that the UK government could still implement changes in 2025 after the upcoming consultations. However, this delay has given operators some breathing room, and companies remain optimistic that their representatives might negotiate a more balanced tax agreement before any significant changes are set in stone.