Ladbrokes Unhappy About Rising UK Gambling Tax
- 04/24/2014By Tommie ClarkGoogle
- The new taxed would cost Ladbrokes around £75 million pounds, which is the equivalent to $125 million per year in extra taxes.
For a business that is always concerned about increased profits this would be a major blow. On the other hand, Britain’s non-gambling public will support the move as the country is desperately in need of extra finances to inject into what is becoming an out of control fiscal budget adding to national debt in the nation.
Currently the tax rate is at 20%, but as the UK government look for ways to target companies for more business tax, it is gambling industry that will have to bear the brunt of the costs needed to pay off rising British debt via a new 25% tax rate to be introduced shortly.
The budget statement came out on Wednesday, March 19 announced by Chancellor George Osborne.
His reasons are due to the widespread increase of the number of fixed-odds betting machines that are said to be highly addictive, and so his tax increase is justified. What is actually happening is that the bad press gambling receives because of a minority of gamblers that cannot control their habits, increasing tax on an item where these companies profit from these addictive players, makes for a reasonable target for the government.
Ladbrokes and other bookmakers have been making a considerable profit from these fixed-odds terminals, and this has helped the gambling companies increase revenue as they have generated popular interest from the public that use the terminals regularly. However, the result of the rise in tax has hit the shares of many of the bookmakers hard in the teeth as the additional 5% means revenue and profits are going to take a hard hit once the tax is introduced.
Ciaran O’Brien, who is Ladbrokes acting spokesman has said that they will be pressing urgently to have the tax bill reconsidered. He argues that the government are targeting success. Due to the popularity of the betting terminals the government have seen the money that us being churned out from these machines, and so they believe that if it’s making money, it should have a higher taxation rate. O’Brien went on to say that there is no consideration of competing sectors equity in the government’s taxation strategy.
William Hill, the biggest bookmaker in the world, has announced that the increase will also hit them hard. They estimate the cost at around £22 million ($37 million) a year.
One day after the British announcement Ladbrokes shares dropped by 4.5% to 131.1p and William Hill also suffered marginal hits falling by 1.4% to 346.6p. The fall in profits could hit no deposit bonus codes and casino bonus codes hard in the UK, meaning online punters could end up being directly affected as a result of the government tax hike.
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