Prior to the budget, shares in UK gambling companies had fallen in fear of tough new regulations. However, they have now risen as a tax on free bets is the only new measure.
Overall, Chancellor George Osborne’s budget was good news for UK gamblers. Until its release on Wednesday, there were fears of punitive tax rises on fixed-odds betting terminals, the popular touch screen gaming machines. However, when it come to gambling, the budget was interested more in increasing tax revenue than preventing exploitation.
Following the introduction of a duty on remote gaming in December 2014, the new tax on free bets is an attempt to benefit from the flourishing industry of online gambling in the UK. When the 15% tax on online gambling revenue was introduced in 2014, free bets were initially excluded. It was now felt, though, that online “freeplays” were being treated favourite compared to, for instance, a free bet at a horse track.
Tax on free bets not enough to keep shares down
By Wednesday evening, mere hours after the budget announcement, shares in UK gambling companies were rising. They had fallen sharply on Monday, with gambling news filled with rumours of a stricter taxation regime. Ladbrokes shares fell 5% on Monday, but by Thursday had risen more than 8.5%.
Gamblers in the UK will hope that this is good news for future budgets under the Conservative government. Gambling was seen a a potential partner for smoking in the category of “sin” industries to be punished. However, besides the minor tax on free bets, the government clearly does not consider them equally worthy of regulation.