On Wednesday, Chancellor Rishi Sunak announced the UK Budget for 2021, which included several key measures that will impact the gambling sector. While some of the changes were expected, others came as a surprise to industry experts and could have significant consequences for businesses operating in the sector.
One of the most notable changes announced in the Budget was the increase in the rate of Remote Gaming Duty (RGD) from 21% to 25%. This tax applies to online gambling companies that provide services to customers in the UK, and the increase is set to come into effect from 1 October 2021. This move is expected to generate an additional £50m in tax revenue for the government in the 2021/22 financial year.
The increase in RGD has been met with concern by industry stakeholders, who argue that it will place additional financial strain on businesses already struggling due to the impact of the Covid-19 pandemic. Many companies in the sector have seen a sharp decline in revenue in recent months as a result of the closure of retail betting shops and the cancellation of sporting events, leading to job losses and the closure of thousands of outlets across the country.
In addition to the increase in RGD, the Budget also announced a review of the Gambling Act 2005, which will consider the regulatory framework for the sector. This review is expected to address issues such as advertising, sponsorship, and online gambling, and could lead to significant changes in how the industry is regulated.
Industry experts have welcomed the review as an opportunity to modernize the regulatory framework and address some of the concerns around problem gambling and the impact of advertising on vulnerable individuals. However, there is also concern that the review could lead to further restrictions on the sector, which could have a negative impact on companies’ profitability and growth prospects.
Overall, the measures announced in the Budget are likely to have a significant impact on the UK gambling sector, with companies facing higher tax bills and increased regulatory scrutiny. While some in the industry may welcome the opportunity to address longstanding issues and improve standards, others will be concerned about the impact on their bottom line. As the sector navigates these changes, it will be essential for businesses to adapt and innovate in order to survive and thrive in an increasingly challenging environment.
