Deloitte UK Tax Deloitte news room Contact us

Budget 2007 podcast

Tax Rates & Allowances

Betting and gaming changes

The rate of remote gaming duty (RGD) for non-UK established online betting and gaming operators will be set at 15% for those operators that are required to be licensed under the Gambling Act 2005 (expected to come into force on 1 September 2007). This rate mirrors the rate of gross profits tax that was introduced in October 2001 for UK established betting and gaming businesses.

There will be no changes to the way in which bingo is taxed in the UK, despite the Chancellor having come under heavy lobbying prior to the Budget. The exemption for small stakes, prize bingo and fund raising bingo will remain however there is no extension of this relief to ‘mainstage’ or commercial bingo.

Casino operators can expect to see revised bandings for gross gaming yield including the abolition of the lowest bands of duty, and the imposition of a new high rate. The new starting rate will be 15% and the higher rate will be set at 50%. These new bandings are expected to raise an additional £35m in 2008/2009, representing about 22% of the total duty collected last year.

Finally, there are some consequential amendments to realign specified gaming machine categories with social definitions of these categories and ensure that such definitions of terms are consistent with the Gambling Act. There are also consequential provisions which are not intended to have a direct impact, but which maintain consistency between tax rules and social law rules.

Our view
The rate of RGD is broadly what was expected, although not hoped for, within the online betting and gaming industry. Helpfully however, it confirmed that player-to-player participation fees for remote betting and gaming will remain exempt from VAT.

The changes for casinos will come as an unwelcome surprise to such operators; particularly those that are intending to, or have bid for the 17 new casino licences (including the super-casino) as this will have an impact on their financial projections for such enterprises, as well as existing smaller casinos who will be disproportionately affected by the abolition of the lower rates.



	Security \| Legal \| Privacy
	© 2010 Deloitte LLP. All rights reserved. Deloitte refers to one or more of Deloitte Touche Tohmatsu, a Swiss Verein, and its network of member firms, each of which is a legally separate and independent entity. Please see About Deloitte for a detailed description of the legal structure of Deloitte Touche Tohmatsu and its Member Firms.