4H Materials

UK government launches consultation on proposed RET gambling levy

Timeline is moving and we are observing more and more government initiatives aimed to develop responsible gambling measures. One of recent news is the proposal of British government to introduce 1% levy for operators which is aimed to fund research, prevention and treatment of gambling addiction.

Ivan Kurochkin, Partner and one of the founders of 4H, comments on the situation:

"Introducing a levy on online gambling companies is a significant step towards addressing the growing issue of gambling addiction. This move shows a commitment by the British government to prioritize the well-being of its citizens over profits.

Allocating funds for research, prevention, and treatment is crucial in providing necessary support for those affected by gambling-related issues. It's essential that any measures taken are implemented effectively and transparently to ensure the intended benefits reach those in need.

Drawing on international experience, similar levies have been successfully implemented in other countries to address gambling addiction. For instance, Australia and some Scandinavian countries have seen positive outcomes from levies on gambling operators. These funds have been instrumental in financing educational campaigns, treatment programs, and research initiatives.

Moreover, this move aligns with the broader trend of countries recognizing the need to regulate online gambling more rigorously. Many nations are implementing measures to ensure responsible gambling practices, with levies being a key component. By considering this approach, the British government is aligning itself with international best practices, demonstrating a commitment to mitigating the harms associated with excessive gambling.

It's important, however, to carefully study the experiences of other countries to tailor the levy to the specific needs and dynamics of the British gambling market. Learning from both successful and less successful implementations abroad will be crucial in crafting an effective and balanced policy.

Certainly, it's important to consider the potential negative effects for operators:

1. Competitive Disadvantage: The introduction of a levy may put British online gambling companies at a competitive disadvantage compared to operators in jurisdictions without such a levy. This could potentially lead to a shift in consumer behavior towards operators located in regions with lower tax burdens.

2. Reduced Profit Margins: For online gambling companies, a levy of up to 1% could significantly impact their profit margins. This might lead to reduced investments in innovation, technology, and customer experience, potentially affecting the quality of services provided to customers.

3. Risk of Pushing Operations Underground: In some cases, operators might seek to evade or circumvent the levy, potentially resorting to unregulated or offshore markets. This could undermine the government's efforts to promote responsible gambling and protect consumers.

It's crucial for policymakers to strike a balance between addressing the social issues associated with gambling addiction and ensuring the continued viability and competitiveness of the industry. This may involve implementing the levy alongside other regulatory measures and offering support to operators in adjusting to the new framework".