Gambling reforms in the UK: authorities reluctant to impose a statutory levy on operators

The United Kingdom makes another attempt to reform its gambling laws. According to reports, the white paper on gambling legislation is likely to be delayed once again.

The main difficulties are due to the fact that the majority of the Cabinet oppose the introduction of a statutory levy on gambling operators. The white paper states that the money collected from taxes should be used to fund programs and initiatives that help minimize gambling-related harm.

Had this tax been imposed, all operators would have become liable for the general gambling duty. For now, it continues to be voluntary for gambling companies.

According to the proposed reforms, the introduction of a mandatory 1% tax would bring an extra £130 million per year to the Treasury. All these funds would be used to support initiatives dedicated to fighting gambling addiction. As of now, with the levy being voluntary, the Treasury receives around £35 million annually.

It is not yet clear why most ministers are against a compulsory fee. Many of them insist that it is quite a drastic step to take. There have also been reports that the majority of those who oppose the levy are the HM Treasury representatives. HM Treasury, the UK’s finance ministry, has not yet commented on this information.

Incidentally, the white paper was supposed to be released back in December 2021. Initially, it was delayed for several months, with the new release date being in July 2022. Then, it got delayed once again due to the upheaval in the government caused by Boris Johnson’s resignation as prime minister of the United Kingdom. The final date for the publication of the white paper is yet to be announced.

What we know about the white paper so far

The white paper is a document regulating the current gambling laws in the UK. It is periodically amended in one way or another, despite the fact that, to this day, it has not been published and presented to the public.

At the moment, the UK gambling industry is still operating under the laws that were enacted several decades ago. The announcement of the white paper is an endeavor by the government to amend these laws and adapt them to modern times. So far, none of the attempts to make changes in gambling regulation have been successful, as the lawmakers repeatedly fail to come to a common agreement.

Essentially, the adoption of the white paper should help do the following:

  • Assess the extent of harm caused by gambling;
  • Outline the key priorities in the gambling industry development;
  • Define what the term “gambling” encompasses;
  • Streamline the regulators’ operations and make them keep up with the latest trends and innovations in land-based and online gambling.

Another important goal of the white paper is to inform gamblers about the danger of gambling addiction. Players should have a clear understanding that, regardless of circumstances, the house always wins. The white paper’s authors believe that gambling is not sufficiently tested and regulated—yet it is as addictive as alcohol, cigarettes and drugs.

The adoption of the white paper is now more necessary than ever. Recent surveys show that online gambling is becoming more sought-after each year. According to the UKGC’s reports, games of chance are now in high demand among men and women of different ages. The online gambling popularity has increased significantly over the last 4 years.

Thus, gambling is becoming a real public health problem. Surveys suggest that, of the 1.4 million British adults who gamble on a regular basis, 3% are classified as “problem gamblers”. In order to reduce this number, several reforms are proposed. One of them is the abolition of VIP incentives. Another reform is the introduction of a mandatory levy on gambling operators, which we covered above. Furthermore, the white paper’s drafters propose a ban on front-of-shirt gambling sponsorship in the Premier League.

The modern UK gambling scene

Today, the United Kingdom is considered one of the most developed countries that allow land-based and online casinos, as well as virtually all types of gambling. The current legislation facilitates the active development of the gambling industry. Local operators enjoy low tax rates, while non-residents are totally exempt from most of the fees and expenses.

Land-based and online gambling establishments in the UK are still regulated by a law that was enacted back in 2005. Most of its provisions simply do not correspond to present-day realities and are in dire need of amendments.

The active development of the gambling industry is very profitable for the country. According to the Ernst & Young report, it brings over £7.2 billion to the state budget annually. Moreover, the industry provides more than 110,000 jobs.

Mar 9, 2023
Igor Rumyantsev
Igor is the Head of Banking and Licensing Department at GamingLicensing who has over 15 years of experience in the industry. He is responsible for game and payment system integration, iGaming product licensing, and B2B certification. Igor is an expert in the gambling sector and game licensing. He keeps a close watch on industry trends and is always open to new ideas that can improve GamingLicensing’s services and help our clients.