UK Treasury ‘has a way to go’ to understanding industry complexities, says CMS tax co-head
Summary
Stephen Hignett, CMS co-head of tax, tells iGB the UK Treasury still struggles to grasp the nuances of the gambling sector ahead of the Budget. The article explains why many UK-facing operators keep an offshore presence (Gibraltar, Malta) — a mix of historical, competitive and regulatory reasons rather than simple tax avoidance. Hignett traces choices back to the era before the 2005 Gambling Act and explains why moving onshore could have left firms at a competitive disadvantage.
The Treasury launched a consultation that suggested simplifying the current three-rate, profit-based system into a single rate — an idea that drew heavy pushback because it would raise betting duty (from 15% towards 21%) and could seriously damage retail betting and horse racing. The Treasury Select Committee has recommended considering higher taxes for high-risk verticals such as online casino. Hignett notes the government could implement changes either from midnight on Budget Day or at the start of the next financial year, with practical system-change dates set out in the Finance Act.
Key Points
- The Treasury does not yet fully understand the historical and competitive reasons many gambling businesses operate from offshore hubs.
- Operators went offshore partly because remote gambling was effectively illegal in the UK until the 2005 Act (enforced from 2007), making onshore operations uncompetitive at the time.
- An April consultation proposed consolidating three duty rates into one, which would raise betting duty and drew strong industry opposition.
- Higher taxes on high-risk verticals (eg online casino) have been proposed by the Treasury Select Committee.
- Any announced duty rate changes could take effect either immediately at Budget Day or from the next financial year; rule changes would be set out in the Finance Act with specific implementation dates.
Context and Relevance
This matters to operators, advisors, investors and high-street betting firms. Proposed tax reform could shift competitive dynamics, squeeze margins (especially in retail betting and horse racing) and force operational or jurisdictional changes. The piece sits within a broader trend of governments scrutinising gambling for both fiscal revenue and social harm, so any policy change will have regulatory and commercial knock-on effects.
Why should I read this?
Quick and blunt: if you run, advise or invest in UK-facing gambling businesses, this could change your bottom line — and soon. We skimmed the politics, the consultation fallout and the likely timings so you don’t have to.
Author style
Punchy — this isn’t just industry chatter. Potential tax moves could seriously reshape parts of the sector; worth reading if you need to plan for margin pressure or compliance changes.
