UK Gambling Companies Lose £2bn Due to Possible Tax Increases
Big Drop in UK Gambling Company Shares
Shares in UK gambling companies have fallen sharply, losing more than £2 billion in value. This drop happened after news that the government may increase taxes on the gambling industry by between £900 million and £3 billion.
Why Are Taxes Going Up?
The UK government is looking for ways to cover a large financial gap of £22 billion in the country’s budget. Some experts, called think tanks, have suggested raising taxes on the gambling industry to help fill this hole.
Who Wants the Tax Increase?
Two think tanks are pushing for these higher taxes:
- Social Market Foundation (SMF) – They suggest increasing online gaming taxes by £900 million.
- Institute for Public Policy Research (IPPR) – They want to increase taxes on the industry by nearly £3 billion.
The government is considering both ideas, but experts think they may go for the smaller tax increase.
Investors React to the News
Because of these possible tax increases, many investors have decided to sell their shares in gambling companies. This caused the value of several companies to drop:
- Entain (owner of Ladbrokes) saw its shares fall by 8%.
- Flutter (which owns Paddy Power and SkyBet) dropped nearly 6%.
- William Hill (owned by Evoke) dropped by 14%.
- Playtech (a gambling software company) lost 1%.
- Rank (owner of Mecca Bingo) fell by 3%.
Altogether, these losses added up to more than £2 billion for the gambling industry.
What Could Change for Gambling Taxes?
The IPPR has suggested raising taxes on more harmful gambling products, like online casino games while leaving lower-risk activities like the lottery and bingo alone. They want to double the tax on high street bookmakers’ profits and increase taxes on online gambling from 21% to 50%.
The SMF, however, suggests a smaller increase in online gambling taxes, from 21% to 42%, which would raise around £900 million. This plan will be officially presented soon.
Concerns About the Impact
Some experts warn that increasing taxes too much could hurt the gambling industry, especially smaller companies. Big tax hikes could cause these companies to lose money and even quit. Others believe that these tax changes are part of tougher rules that will make it harder for gambling companies to operate.
What the Gambling Industry Says
Grainne Hurst, the head of the Betting and Gaming Council, said that anti-gambling groups are pushing these tax proposals and aren’t realistic. She warns that more taxes could hurt the industry, cost people their jobs, and damage the horse racing business. The industry is already spending a lot of money on new rules and paying £100 million per year for problem gambling programs.
Conclusion
The future of the UK gambling industry is uncertain as the government considers these tax changes. Investors and companies are worried about what might happen if taxes go up, which has already caused a big drop in the value of gambling shares. Everyone is waiting to see what the government will decide in the upcoming budget.
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