Increase in remote gaming tax could kill off small UK operators
The rise in Remote Gaming Duty (RGD) tax in the UK to take effect in October 2019 may lead to smaller operators selling off their businesses, says industry analysts.
The Chancellor of the Exchequer Philip Hammond in a budget statement to parliament announced an increment in the RGD from 15 percent to 21 percent.
This is to address the expected shortfall in Treasury income resulting from the cut in the maximum FOBT stakes from £100 to £2.
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The increment does not affect online sports betting and horse racing taxes.
The co-founder of RB Capital, Julian Buhagiar termed the new tax hike as unavoidable but disruptive and expects giant iGaming operators to take advantage by claiming more market shares.
“The rise was not unexpected but this doesn’t take away from the further pain many UK-facing operators are going to have to prepare for,” Buhagiar said.
“In addition to the fallout from changes in Brexit-related legislation, this industry is constantly adapting to wave after wave of regulatory changes and, because of this announcement, some operators will feel like throwing in the towel.
“We’ve already seen a spate of mega deals with the likes of GVC and the Stars Group completing major M&A transactions. The rate rise will only mean one thing: that life will get tougher for smaller operators and they will either be forced to downsize UK operations, shift market focus elsewhere or sell to the highest bidder.”
The CEO of the Remote Gambling Association, Clive Hawkwood, in a statement said the UK gambling industry has become less attractive to online operators and would turn to other countries for the lost revenues.