As the end of 2018 approaches, what better way to look back on the past 365 days than predicting what could or should happen on the next trip around the sun?
For one country, in particular, 2018 held a surprising amount of news for the gambling industry, from mentions in Parliament to the highest fines ever seen by a regulator, not to mention a flourishing market. Here, we take a look at just what the UK can expect in 2019. Will it be more of the same? Or is there trouble brewing?
Building on a decade of success
The UK has been riding high for the last decade, with nearly a £14bn ($17.9bn) acquired in 2017 alone. Perhaps unsurprisingly with the rise in mobile phones, online gaming takes a large slice of the cake – £4.7bn ($6.0bn) to be exact.
So what did 2018 bring? Well, although there has been a big focus on the regulation behind the games, the amount of prosperity the industry creates was also noticed by the government. So much so that they wanted to slow down the implementation of FOBTs to protect jobs and the treasury’s coffers. While not as heavily taxed as in some countries, tax on operator revenue is a big crowd pleaser for the current government.
However, the government has announced plans to increase the online gaming tax in 2019, as well as implementing the FOBTs’ maximum stake reduction after a Guardian inquiry revealed that the delay was based on evidence submitted by the British Bookmakers Association.
Since May 2018, the UK has been hearing about how fixed-odds betting terminals allow vulnerable people to lose a lot of money very quickly. After a review by the Department for Digital, Culture, Media, and Sport, the government decided to cut the maximum FOBT wager from £100 ($128) to the very minimum level of £2 ($2.6), even though the UKGC did not recommend this.
The reduction was due to take place in 2019, but legislators decided to postpone it to April 2020, which caused almighty chaos. Labour Party voices, including Deputy Leader Tom Watson, strongly opposed the delay, citing concerns over coffers instead of people. The government responded that they were more concerned about job losses, but the evidence it was based on was then found to be flawed. Now the government has backtracked, and it is believed the maximum stake will be cut to just £2 in April 2019.
This will lose the Treasury around £100m ($128m) each year, a big drop from the £457m ($584m) the exchequer currently collects in taxes from the machines. Land-based bookmakers have opposed the early implementation of the maximum stake cut on FOBTs, which they believe will force them out of business and lead to further empty high streets.
Still, despite the to-ing and fro-ing, the government seems to have found a way of recouping some of the cash.
Tax, tax, and more tax
The first thing that 2019 holds is a huge jump in the tax rate. At present, the POC tax on online gambling is 15%. This tax, introduced in 2014, targets Brits using online casinos based in the UK.
According to UK newspapers, the planned tax is 21%, which perhaps unsurprisingly is expected to make up the difference from the FOBT loss of £1.15bn ($1.47bn) over five years.
Whether this will take place remains to be seen. Operators are certainly grumbling about it, not least that a tax increase hot on the heels of the maximum stake becoming lowered is a tad unfair to their budgets.
However, it does level the playing field, as all operators will then pay the same tax accordingly.
The UK Gambling Commission, led by a new CEO, Neil McArthur, since April, has become a bastion for Europe as it looks to weed out operators who deliberately mislead or attract its vulnerable citizens. So far this year, it has fined operators for poorly designed adverts and failing to keep punters safe, and it has also rapped its hammer on the knuckles of some well-known names who have been lax about checking exactly where the money is coming from.
The use of gambling for fraud and corruption is obviously worrying the industry, and steps by the UKGC are being watched not just by other EU countries but worldwide as the country treads a line between accepting gambling to boost treasury coffers while also protecting those who are vulnerable.
With the rise of online gaming and mobile gambling predicted to boost the industry further over the next few years. My predictions for next year include:
- Further fines – the UKGC just loves to make an example.
- A kickback (excuse the pun) from football but an overall acceptance of sports advertising by operators.
- Overall growth in UK consumption despite the FOBT drama as more users turn to online gaming.
Do you agree?