Summary
- Entain has joined the ranks of UK gambling operators urging caution as sports betting tax rates face a swift surge.
- The operator contends that this move would merely stifle the regulated market and push players to seek alternatives abroad.
- Entain pointed to the Netherlands as a case in point, showing how raising taxes might actually result in a decrease in government revenue.
Entain has voiced its concerns alongside other companies, criticizing the potential rise in gambling taxes in the UK. They warn that this move could unintentionally harm the entire industry.
Entain warns against the rapid increase in betting tax
The implications could be profound, warns the company, emphasizing that a government decision to increase gambling taxes might end up reducing government revenues and, inevitably, burdening gamblers with the costs. Rob Wood, Chief Financial Officer of Entain, referenced a recent admission from the Dutch Gambling Authority, which confessed that its tax increase had backfired, contradicting its core aim of consumer protection. In the Netherlands, a hike in gambling taxes could lead to a loss of €200 million in tax revenue by 2025 alone. Wood argues this proposal would have further negative impacts. With tougher business conditions, operators would be forced to offer less favorable odds to remain viable. As a result, patrons might seek alternatives offshore, or end up with poorer options locally. The proposed tax increase specifically targets sports betting operations since lawmakers intend to tax online casinos and betting platforms at the same 21% rate. Sports betting currently has a 15% tax rate. It is worth noting that sports betting often has slimmer profit margins compared to iGaming, possibly leading lawmakers to misunderstand the situation. Wood highlighted Entain's significant contribution: Our sector contributes around £4 billion annually to the UK Treasury and employs over 100,000 people. Entain alone pays over half a billion pounds to the UK Treasury each year, making us one of the top 20 taxpayers in the country, he stated.
The Netherlands serves as a plain example of what to expect
Wood cautioned that sharply increasing taxes, as seen in the Netherlands, could backfire. Such a move would inevitably push businesses to find ways to counteract the impact, a scenario beneficial to no one—not the betting platforms and certainly not the bettors. Entain is also grappling with challenges elsewhere. The company has earmarked AU$100 million to cover a potential fine from Australia's financial regulator, Austrac.
