Gaming firms in the UK make millions of pounds every year through voluntary contributions to various health and charitable organizations. However, according to a recent report by Mail on Sunday, these contributions could become mandatory when the updated gambling white paper is released by the government.
A taxi can be seen parked outside a Genting Casino property in the UK. Speculation is rife regarding the affordability checks and the newly proposed taxes in the gambling white paper. (Image: Alamy)
Rumors of a potential tax on the gaming industry in the UK have been circulating for some time. But, debate has been ongoing as to whether or not it would make its way into the final version of the reforms.
The UK’s National Health Service (NHS) has a policy of refusing to accept any money that originates from the gaming industry. Therefore, a compulsory levy may be necessary in order to satisfy the NHS and provide the government agency with additional financial resources.
Funds Allocated for Gambling-related Problems
It is impossible to predict how much the operators will be made to pay, however, previous comments have indicated that it could be more than what they are currently providing. If the rumors are accurate, the funds will be used to finance programs that are intended to address and treat gambling-related issues.
This is despite the fact that the UK Gambling Commission (UKGC) has reported that the level of problem gambling in the country is only 0.2%. This figure has remained consistent for the past few years, in part due to the millions of pounds that operators have already donated. This is in addition to the mandatory taxes, which have amounted to billions of pounds, that gaming companies have already paid.
The UK’s gambling regulations require annual contributions, amounting to over £123.18 million since 2019. This is not a legal requirement, though. The NHS, which donates money to GambleAware and other projects, has stated that receiving any gaming industry donations to fund gambling harm would be a conflict of interest. However, it does not appear to have the same stance when it comes to receiving money through a mandatory levy.
In addition to the levy, affordability checks are again being discussed. This time, they are referred to as credit checks. Mail on Sunday added that sports betting operators will be expected to carry out automatic background checks on bettors who spend “moderate” amounts.
This involves scrutinizing for any open debt collection judgments and other similar investigations. There is still no clear definition of what constitutes a “moderate” amount of money, so this may vary depending on the level of spending.
White Paper Still in the Process of Being Developed
The source of these rumors is reportedly an anonymous but reliable insider. The UKGC is said to be responsible for calculating the tax at an operator level, using revenue figures. The tax is in addition to the money that operators already pay to the regulator, as well as the hundreds of millions of pounds it receives through fines and settlements.
This process is likely to require a period of consultation, so the levy will not be introduced immediately after the white paper is released. The government had initially hoped to present the white paper in September 2020, but this was postponed several times. The most recent indication was that it would be available by the end of March 2021, however, this has not occurred.
The white paper updates numerous gambling laws that have been in place in the UK since 2005. Operators and other parties in the industry have been eager for its arrival so that they can begin planning for the next phases of their activities. The ongoing delays are further increasing this eagerness.
Once the white paper has been presented, there will still be a period that is required for feedback and input before any new laws can be implemented.