Data Forecasting study looks at UK online gambling tax

Data Forecasting study looks at UK online gambling tax

The UK could collect almost £386 million in 2015 by instituting its planned 15 percent point of consumption tax according to a new report from global gambling industry data provider GamblingData.

The proposed duty would see online betting taxed at the point of consumption from the end of 2014 rather than at the point of supply as it is at present and is intended to capture money from offshore operators taking wagers from UK-based punters.

The latest Data Forecasting study from GamblingData predicts that the UK online gaming market could be worth £2.74 billion by 2015, more than double its size in 2008, while a rate of compliance of 92.5 percent would see the Exchequer collect £385.7 million.

Despite many leading voices in the gaming industry warning that a higher rate of tax would lead to more non-compliance, GamblingData foresees the same rate of compliance on a tariff of 20 percent would earn the UK £514 million in tax.

“What is interesting is that under almost every scenario, the projected revenues generated by a point of consumption tax are very much meaningful both for the government and the operators,” said Daniel Stone, Head of Content for GamblingData.

“It is understandable, therefore, why there has been a protracted debate over its legality, its timing and its form. The wider tax avoidance debate taking place in the UK makes this a tricky moment for the operators. But, as our forecasts make clear, the importance of a stable tax and regulatory regime in the UK for many leading gambling names is also a vital factor. How the industry's leaders and the UK Treasury negotiate the transition to the new tax regime could prove to be one of the defining moments for the online sector.”

GamblingData predicts that the gambling industry’s preferred ten percent tax option would bring in £274 million with a 100 percent compliance rate while the UK government would bring in more under its projected 15 percent plan so long as the rate of compliance remained above 67 percent.