Online gambling company Leo Vegas has used the example of the tax rate in Denmark to reassure investors that the higher level of UK Remote Gaming Duty (RGD) will not impact its business.
Earlier in the week, Chancellor Philip Hammond announced that Remote Gaming Duty would be increased from 15 percent to 21 percent, with effect from October 2019, a change designed to coincide with a stake reduction on Fixed Odds Betting Terminal (FOBT) stakes.
According to details released by the Treasury, the increase in RGD is likely to lead to a boost of £1.22 billion to government tax revenue in the first five years. The higher RGD rate, aimed at offsetting the loss of tax revenue from FOBTs, has been criticised by some in the betting industry as it is not yet clear what impact the FOBT changes will have.
But the government has given gambling companies a period of 12 months to adjust to the proposed changes and speaking about the rate rise earlier this week, the Communications Director for Leo Vegas, Irena Busic, said that the company had experience of operating with a similar rate:
We are active in other regulated markets with a tax rate in that region, for example the 20% tax in Denmark where we are still able to run a sustainable and healthy business.”
Busic also said that the delay of a year before the RGD increase would enable the market to adjust, so that it wouldn’t simply be betting operators who bear the burden of the additional cost, and she confirmed that Leo Vegas would be looking for economies of scale to absorb the increase.
Word tax with stacked coins image taken from Shutterstock
Steven is a seasoned freelancer writer from Coventry in the UK. He specialises in writing about the gambling industry and aims to provide unbiased, trustworthy and high quality content to the public. Whilst away from his freelance writing work he enjoys watching the football and following the F1.