Comments Welcome ex-Chancellor Wants to Raise Online Gaming Tax From 21% to 50%

[ExeMedia]

Just a thought, please don't shoot me down lol....

Having read what I have read over many, many years here on CM. Surely only true "addict" type players will deposit and play at 90% or below?

Know it is a serious uphill struggle but really hope the casino operators can wave a magic wand of some description and find an alternative to lowering RTP's further still after this (ridiculous, needless, greedy) take hike.

21% to 25% for example would have made millions extra but doubling it is just crazy!

As I mentioned, we in Czech Republic have 35% tax from GGR made on casino and RTP is still around 96%, depends on the game. Just the income is lower of course. We´ll see how casinos in UK will react, if they will be ok with the smaller piece of the pie, but the player will come back, or they will lower RTP and loose players.

 

[C-man70]

I can only see disastrous consequences for everyone.

• Nobody apart from the vulnerable are going to play in casinos under 92 RTP
• The vulnerable will lose quicker leading to more financial hardship which leads to all sorts of welfare and society issues.
• Job losses across the whole industry.
• Less tax to the Government as people will either not play or goto Black market.

I have seen several MP's quote this will help with the harm this industry does to certain individuals. Who on earth has advised them that ( Think tanks full of non gaming graduates).

I can only see more pain for the vulnerable, to society, to crime, to families and less money raised through taxation. A totally ill informed decision made by the Government which will just drive more despair.

It reminds me of when USA banned alcohol.....this drove up more crime and more social issues.

 

[satchnz]

I guess we all have to realise that people on this forum tend to be more in step with what RTP is, how it impacts your play time, and simply that RTP can vary for the very same slot depending on where you play.

There are countless people who have no clue what RTP is and will still play regardless. Sure, they may realise their deposits don’t last as long but they won’t realise why.

 

[ChopleyIOM]

I'm finding it hard to give too much of a shit about this. Whichever way you want to slice it, gambling is a societally useless pastime, 'best case scenario' is that people won't lose too much, will get a modicum of entertainment and not fall into any of the bear traps that gambling represents to the individual and therefore by extension to wider society - because none of us exists in a vacuum.

I say this as someone who still enjoys having a gamble online, but it's not an activity I can particularly defend on any level, and if it disappeared from the world tomorrow I wouldn't really be sad.

There's also the inconvenient truth that any 'gambling institution', be it online or land-based or wherever, relies on a disproportionately small number of addicts to keep the business afloat. Remove the addicts, 'distressed players', and those who are gambling more than they can afford, and there's not really a viable business model remaining.

(The industry even has a term for people who lose the lot, which is 'playing to extinction'.)

I'm currently researching the next video for my channel, I have access to a large number of historical Coinslot magazines and other UK gambling industry publications, and it's interesting to see that there's been a long-running and continual conflict between the industry in the UK and those who were suggesting, 'Hang on folks, maybe we've got a problem here', and I'm talking right back to the 1970s.

One of the major flashpoints in the UK was amusement arcades and the accessibility of gambling to children via fruit machines, where the industry would routinely argue, with a straight face, that children being able to walk into what were effectively junior casinos was perfectly fine, thank you very much.

With online casinos no one is remotely suggesting that it's an activity that should be available to children, so there's that at least, but given the irrefutable evidence of the multiple harms that gambling addiction causes in the UK on an ongoing basis (which the rest of society very much has to pick up the expensive pieces of), having the industry tip a bit more cash into the pot in the form of taxation seems entirely reasonable to me.

We live in a country where 39% of adults have £1000 or less in savings (16% have no savings at all). I recently decided to go up against Who's The Bride and play it until I got a wildline, I got over £1000 in the hole on 18p spins and by the time it finally coughed a wildline (a double no less) that resulted in a £1072 bonus, I was still a bit down! And that's on the full fat 96.82% RTP version. The spin that paid that bonus is the last spin I ever did on the game.

Now that's entirely within my financial means and was neither here nor there in monetary terms, but for 39% of adults in the UK, that tussle would have completely wiped them out financially.

So overall, this tax hike on the industry isn't something I'll be losing any sleep over.

 

[satchnz]

@ChopleyIOM we are not all addicts. Some of us play for entertainment, and want value for our money. Lower RTPs inevitably mean less play time, and that is an issue for many.

Apologies but I am showing my ignorance here but do these tax changes impact IOM even?

 

[ChopleyIOM]

@ChopleyIOM we are not all addicts. Some of us play for entertainment, and want value for our money. Lower RTPs inevitably mean less play time, and that is an issue for many.

Apologies but I am showing my ignorance here but do these tax changes impact IOM even?

I literally didn't say that everyone here (or anywhere) is an addict. This is what I actually said.

I don't think this is a particularly controversial assertion, dunover himself has posted to that effect here at CM, although it was a few years ago now. (From memory he'd seen the backend numbers from somewhere.)

As for what effect it'll have on the IOM I don't yet know, we have a lot of reciprocal agreements with the UK and we're waiting for the full list of what will change here as a result.

I'm not a 'ban this sick filth' kind of person, generally speaking I'm very much of the opinion that adults should be free to choose what they do with their own time, money and bodies, as long as they're not hurting anyone else. In the case of gambling however, there very much is a harm to many people, their families and friends, and wider society - and the bills for that have to end up being paid somewhere.

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[Lemon]

I think your views on the industry are largely biased due to your own personal experiences of gambling harm. However, it's an inescapable truth that people are going to lose their jobs over these tax increases and a lot of them will be ordinary folk like you and me with families, but who just so happen to work in this particular industry in a shop-level capacity due to necessity rather than any sort of personal choice. Would you be happy for all these people to be unemployed and in a dire financial predicament, or would your sense of smugness and satisfaction from seeing the industry get tackled from behind dissipate for long enough to allow you to remove the blinkers and feel a modicum of sympathy for those affected?

And as @satchnz says above, players who are able to gamble responsibly as a hobby will also be hit in the pocket as the higher-ups scramble to maintain their profit margins in whatever ways they can. It wouldn't be so bad if all the money raised from gambling tax went back into the industry in some way in order to make it more robust in terms of image and in how secure it is for players. Instead the Government are going to be taking money out and spunking a lot of it on God knows what, so no-one's really going to win are they?

I don't blame you for hating gambling and the industry as much as you do. But you keep getting drawn back into it like a moth to a flame. Sometimes you just have to get as far away as possible from something that is damaging to you, rather than throw sticks and stones.

 

[ChopleyIOM]

I think your views on the industry are largely biased due to your own personal experiences of gambling harm. However, it's an inescapable truth that people are going to lose their jobs over these tax increases and a lot of them will be ordinary folk like you and me with families, but who just so happen to work in this particular industry in a shop-level capacity due to necessity rather than any sort of personal choice. Would you be happy for all these people to be unemployed and in a dire financial predicament, or would your sense of smugness and satisfaction from seeing the industry get tackled from behind dissipate for long enough to allow you to remove the blinkers and feel a modicum of sympathy for those affected?

And as @satchnz says above, players who are able to gamble responsibly as a hobby will also be hit in the pocket as the higher-ups scramble to maintain their profit margins in whatever ways they can. It wouldn't be so bad if all the money raised from gambling tax went back into the industry in some way in order to make it more robust in terms of image and in how secure it is for players. Instead the Government are going to be taking money out and spunking a lot of it on God knows what, so no-one's really going to win are they?

I don't blame you for hating gambling and the industry as much as you do. But you keep getting drawn back into it like a moth to a flame. Sometimes you just have to get as far away as possible from something that is damaging to you, rather than throw sticks and stones.

I don't 'hate' gambling or the industry as a whole, nor do I advocate for banning gambling, or the destruction of the industry. Some elements of what the industry gets up to I do believe is disgraceful, and a lot of what it has done historically is similarly despicable. I try not to have any hatred in my heart so 'hate' isn't a word I'd use.

People losing their jobs is always a terrible thing, I've been lucky enough to maintain pretty much continual employment my entire life but I remember having to sign on for a couple of weeks when I literally just could not find a bloody thing and it was deeply unpleasant. I take no pleasure whatsoever in anyone finding themselves in a difficult situation as a result of these tax changes, and I'm no fan of the current government or much of what they're doing either, but on this topic I'm hard pushed to find an objection to the principle of what's being done.

Derivco (the tech arm of what used to be Microgaming) here on the IOM have laid quite a number of people off recently, nothing to do with UK tax changes, usual story about 'efficiencies' and 'restructuring for the future' and whatnot, I know a couple of people who were directly impacted and it's been shit for them, they didn't do anything wrong, Derivco just found a way to do things cheaper somewhere else in the world and it was the foot soldiers who paid the price.

Point being is stuff changes, part of the reason I never went anywhere near working in the gaming sector on the IOM was because I was acutely aware the whole thing could be a legislation change elsewhere in the world away, or the stroke of a pen on an executive's desk, from being dramatically curtailed or shut down.

Back on the UK side of things, over the years I've been very critical of both the gambling industry where I feel it's warranted, but also the more wrong-headed regulation and legislation changes from the UK regulator/government, where they often seem to fundamentally misunderstand what it is they're regulating and/or the best way to go about it.

That said, we've all seen the shit the industry has pulled over years, I'm sure we all remember when BTG launched 'Extra Chilli' with a feature buy which immediately enticed the played to take on multiple all or nothing gambles before the feature they'd already bought even started. Or NLC with their ridiculous 'God Mode' spins that let people gamble a month's wages on a 1 in 6 death or glory spin, the idea that this is anything other than crack cocaine gambling without even the merest veneer of a pretence of entertainment is for the birds.

If the industry is going to pull shit like that then it doesn't get to cry foul when the eyes of government regulation and taxation are cast in their direction, however misguided those interventions might be. (The official justification for the banning of autoplay for UK players was particularly spurious.)

All that said I agree with you that it's not the people at the top of the industry that are going to pay the price, and that responsible 'hobby' style players are going to get the shaft as well - that sucks, truly it does. Welcome to capitalism, spoiler alert, it's not designed for the benefit of ordinary joes like us.

They say a picture paints a thousand words, so I'll finish with these graphics.

 

[mack341]

There's a potential argument, I believe, that if the online casinos had not dropped rtp to 94% and below then their profits wouldn't have looked so healthy and therefore taxable to hmrc, they would've still got hit but maybe 30%.

Now if they try to pass this on to the consumer again, the games will become unplayable, so they should've stayed at 96%+ and now would have a bit of leg room to drop to 94% and still have a 'fun' product (on a good day).

To protect the player there should be a mandated rtp level which games can't fall below, or at least extremely clear notification of the game's rtp showing on the game tile, not hidden behind a microscopic "?" in the menu bar most won't even realise is there.

I don't know if the gambling industry still has the same amount of award shows, but it doesn't give off the impression of pulling in their belts and hardship, and I can't remember the CEO's name but she takes home about £500 million in bonus salary, you've can't expect the hrmc not to notice these things, and think maybe we could have a larger slice of the pie.

 

[dunover]

There's a potential argument, I believe, that if the online casinos had not dropped rtp to 94% and below then their profits wouldn't have looked so healthy and therefore taxable to hmrc, they would've still got hit but maybe 30%.

Now if they try to pass this on to the consumer again, the games will become unplayable, so they should've stayed at 96%+ and now would have a bit of leg room to drop to 94% and still have a 'fun' product (on a good day).

To protect the player there should be a mandated rtp level which games can't fall below, or at least extremely clear notification of the game's rtp showing on the game tile, not hidden behind a microscopic "?" in the menu bar most won't even realise is there.

I don't know if the gambling industry still has the same amount of award shows, but it doesn't give off the impression of pulling in their belts and hardship, and I can't remember the CEO's name but she takes home about £500 million in bonus salary, you've can't expect the hrmc not to notice these things, and think maybe we could have a larger slice of the pie.

You mean Denise Coates CBE. Almost all Bet365's profit comes from overseas so not in this equation really. The tax is on UK play only.

Her net worth is said by Forbes to be around $8bn

She's toughing it out a bit this year as her 2024 earnings were 41% down on 2023, a mere £158.7 million ($200m) compared to £270m ($365m) in 2023.

 

[satchnz]

How does she cope?

 

[Lucky Loser]

The people here that think the RTP won't be changed are deluded.

The casinos will try and pass on the extra costs to the players.

 

[DreamRJ]

Well just wanted to say - I have made the decision to stop gambling again. I have done it before - I am just not enjoying it again anymore and it is just getting to frustrating. So I will be stopping again. I really do not know if I will get back to it again this time. I will see how I feel in the future.

 

[gonzo fonso]

i agree with these comments,i will probably have £20 once a week on a friday on a jackpot slot at £0.10p
all these deposits i usually do will stop,lowering RTP will just take the fun out of it

 

[ChopleyIOM]

There's a potential argument, I believe, that if the online casinos had not dropped rtp to 94% and below then their profits wouldn't have looked so healthy and therefore taxable to hmrc, they would've still got hit but maybe 30%.

Now if they try to pass this on to the consumer again, the games will become unplayable, so they should've stayed at 96%+ and now would have a bit of leg room to drop to 94% and still have a 'fun' product (on a good day).

To protect the player there should be a mandated rtp level which games can't fall below, or at least extremely clear notification of the game's rtp showing on the game tile, not hidden behind a microscopic "?" in the menu bar most won't even realise is there.

I don't know if the gambling industry still has the same amount of award shows, but it doesn't give off the impression of pulling in their belts and hardship, and I can't remember the CEO's name but she takes home about £500 million in bonus salary, you've can't expect the hrmc not to notice these things, and think maybe we could have a larger slice of the pie.

There are a whole raft of solid player protections that could be added to the prevailing legislation/regulation, but little appetite for many of them to be enacted. In fairness some of the actions taken over the last few years I agree with, the banning of Feature Buys for example, which pretty much everyone here at CM identified very early doors as being a straightforward exercise in emptying players' pockets as quickly as possible.

'I know', said the industry, 'Let's make our product deliberately shit and frustrating to play, and then offer the 'solution' to the problem we've just deliberately created, for the low low price of a mere one hundred times the cost of what you'd usually be comfortable with gambling'.

And then NLC came along and said 'hold my beer' and we all know where that ended up.

I'm sure we've all heard the phrase 'Britain is a nation of gamblers' like it's supposed to be a good thing, no one would say 'Britain is a nation of drug addicts' and suggest it's a net positive. The government is complicit too of course, the industry was schmoozing around Labour when it became obvious they were going to win the general election, and for all the froth and fury, this latest round of taxes isn't particularly punitive relative to many other industries or indeed people.

And then you've got the National Lottery, which hides behind its 'good causes' label and offers up online scratchcards and other 'instant win' games (hmmm, sounds a lot like an online slot!) with RTPs that are often somewhere around 65-70%. (And an egregiously weighted win table that makes it very, very hard to ever win anything of any substance.)

Land based is a shitshow too, there are random games turning up in UK pubs now on 83%, the legislation says 'there is no minimum RTP requirement', so thanks for that.

I did a video about it recently and I've spent quite a bit of time researching the follow-up, which I'm hoping to get made in the next couple of weeks.

 

[ChopleyIOM]

Coinslot thinks the land-based sector in the UK did OK-ish out of the budget and feels that online gambling was identified as the major 'harm culprit' for gambling in the UK.

In fairness to online I haven't seen UK-facing casinos running games at 83% RTP (yet....), which is what some pub digital cabinets are currently down to at £1 per spin (and they still have autoplay!).

 

[Webzcas]

I'm finding it hard to give too much of a shit about this. Whichever way you want to slice it, gambling is a societally useless pastime, 'best case scenario' is that people won't lose too much, will get a modicum of entertainment and not fall into any of the bear traps that gambling represents to the individual and therefore by extension to wider society - because none of us exists in a vacuum.

I say this as someone who still enjoys having a gamble online, but it's not an activity I can particularly defend on any level, and if it disappeared from the world tomorrow I wouldn't really be sad.

There's also the inconvenient truth that any 'gambling institution', be it online or land-based or wherever, relies on a disproportionately small number of addicts to keep the business afloat. Remove the addicts, 'distressed players', and those who are gambling more than they can afford, and there's not really a viable business model remaining.

(The industry even has a term for people who lose the lot, which is 'playing to extinction'.)

I'm currently researching the next video for my channel, I have access to a large number of historical Coinslot magazines and other UK gambling industry publications, and it's interesting to see that there's been a long-running and continual conflict between the industry in the UK and those who were suggesting, 'Hang on folks, maybe we've got a problem here', and I'm talking right back to the 1970s.

One of the major flashpoints in the UK was amusement arcades and the accessibility of gambling to children via fruit machines, where the industry would routinely argue, with a straight face, that children being able to walk into what were effectively junior casinos was perfectly fine, thank you very much.

With online casinos no one is remotely suggesting that it's an activity that should be available to children, so there's that at least, but given the irrefutable evidence of the multiple harms that gambling addiction causes in the UK on an ongoing basis (which the rest of society very much has to pick up the expensive pieces of), having the industry tip a bit more cash into the pot in the form of taxation seems entirely reasonable to me.

We live in a country where 39% of adults have £1000 or less in savings (16% have no savings at all). I recently decided to go up against Who's The Bride and play it until I got a wildline, I got over £1000 in the hole on 18p spins and by the time it finally coughed a wildline (a double no less) that resulted in a £1072 bonus, I was still a bit down! And that's on the full fat 96.82% RTP version. The spin that paid that bonus is the last spin I ever did on the game.

Now that's entirely within my financial means and was neither here nor there in monetary terms, but for 39% of adults in the UK, that tussle would have completely wiped them out financially.

So overall, this tax hike on the industry isn't something I'll be losing any sleep over.

I am still reading the final page of this thread, but felt compelled to comment on this post by ChopleyIOM. We may not see eye to eye on all things political, but I give you a hat tip for this post.

I have worked in the iGaming industry for the past 25 years, having started work at Ladbrokes on 2nd October 2000. During these 25 years I have worked for an operator for 5 years, as a fully fledged affiliate for nearly 15 years. The last 5 going on 6 years I have worked as a consultant in the industry, Casinomeister being one of the sites I work for.

With all this in mind, I cannot disagree with pretty much a single word of what you have written above.

If there was such a thing as voting for a 'Post of the Month', this post would get my vote.

 

[dunover]

I am still reading the final page of this thread, but felt compelled to comment on this post by ChopleyIOM. We may not see eye to eye on all things political, but I give you a hat tip for this post.

I have worked in the iGaming industry for the past 25 years, having started work at Ladbrokes on 2nd October 2000. During these 25 years I have worked for an operator for 5 years, as a fully fledged affiliate for nearly 15 years. The last 5 going on 6 years I have worked as a consultant in the industry, Casinomeister being one of the sites I work for.

With all this in mind, I cannot disagree with pretty much a single word of what you have written above.

If there was such a thing as voting for a 'Post of the Month', this post would get my vote.

It's true enough what I said before (that @ChopleyIOM alluded to) in that a disproportionate amount of profits within the online industry are gleaned from a small percentage of the players.

I found this out as an affiliate, that the convenient ethical position of being able to maintain that I earned a little each from a lot of customers never came to pass. Ultimately that's due to human behaviour or more to the point, behaviour of certain players.

You can try and protect those if they need or wish to be protected and there are numerous regulatory and online tools to assist with this. Trouble is, the carousel never stops turning and there is a constant stream of replacements for those people.

The one positive here is that the 'replacements' in terms of high-value players tend to spend less than before and that is mainly due to the restrictions mentioned above. Which sadly isn't as positive as I made it sound due to the fact they can find places to gamble outside the sphere of those protections and measures.

 

[Webzcas]

I can only see disastrous consequences for everyone.

• Nobody apart from the vulnerable are going to play in casinos under 92 RTP
• The vulnerable will lose quicker leading to more financial hardship which leads to all sorts of welfare and society issues.
• Job losses across the whole industry.
• Less tax to the Government as people will either not play or goto Black market.

I have seen several MP's quote this will help with the harm this industry does to certain individuals. Who on earth has advised them that ( Think tanks full of non gaming graduates).

I can only see more pain for the vulnerable, to society, to crime, to families and less money raised through taxation. A totally ill informed decision made by the Government which will just drive more despair.

It reminds me of when USA banned alcohol.....this drove up more crime and more social issues.

I am slowly working my way through this thread, so no doubt there will be more replies from me

The points you raise are indeed very valid to an extent. Being objective, whilst I see RTP's being reduced, I doubt it will be at a level that people still comfortable playing at UKGC licensed operations will be turned off.

The reason I say this, is because already they have had the likes of Autoplay removed, the over bearing SoW requirements enforced on them, some of which are akin to filing your tax self assessment before the 31st January each year.

So what I believe is, that players who are still frequenting UK licensed operations, will continue to do so. Unless the RTP's drop to the same level of the Motorway Service Station 'slots'

Your point about job losses is unfortunately a very valid concern. Any industry taxed excessively will have to make hard cost cutting decisions to offset the attack on their profit margins.

As for less tax revenue, just got to look at the falling revenue from the sale of tobacco. Hence Rachel from Accounts is going to hit the vaping industry and eliquids with excessive taxes next October. It has nothing to do with concern for the public health.

 

[TheAddict]

Ahhh, the good old days where you could roll a burn and just flick away any excess.
£27 for 30g of Amber leaf means it's prison rollups and every strand must be accounted for. Damn A-holes!

 

[mack341]

I think I was on Virgin games and decided to load up Spartacus for old times sake, and some horrendous 'new' revamp version loaded, immediately suspicious I went searching for the rtp - it was 92%

I like to play slots but 92% rtp is the quickest way to get me to stop, rather than the quickest way to empty my pocket and keep the casino profits rolling in.

So it will be interesting when this tax rise is active and how the game makers and casinos respond, I have a feeling that a while back they decided to bombard their front/home page with titles of games, lots of new ones, try to create a 'buzz' aspect to counter the reality that all the games now offer less returns/wins to the player.

 

[geordiecolin]

Ahhh, the good old days where you could roll a burn and just flick away any excess.
£27 for 30g of Amber leaf means it's prison rollups and every strand must be accounted for. Damn A-holes!

I sell Turner at £12 for 50g to friends and family.

As for Reeves. Lying to her fellow ministers that there was a black hole to raise taxes suggests to me that they know something that we don't know on the horizon.