Some of Britain’s betting giants were revealed to have quietly lobbied Treasury officials against a proposed industry crackdown, saying it would cost millions of pounds in lost tax revenue.
Executives representing Bet365, Paddy Power and Ladbrokes have met with Treasury and Revenue and Customs officials, warning that a radical overhaul of the industry could drive players into the black market. The meeting was with tax officials rather than ministers and was therefore not required to automatically disclose it.
The betting industry says there is a ‘very real risk’ that the around £3.2billion-a-year tax it remits to the Treasury could be hit by tougher rules for the sector. A government white paper on gambling reforms is due to be published soon.
Matt Zarb-Cousin, director of campaign group Clean Up Gambling, said: “The industry is trying to water down proposed reforms in the gambling review by lobbying under-the-radar tax authorities. This is massive propaganda from an industry that has been evading taxes for years. I hope the Treasury doesn’t buy it. There must be full transparency on this lobbying campaign.
The Department for Digital, Culture, Media and Sport announced a review of gambling laws in December 2020 as too many people suffered significant harm. A 2018 NHS survey showed there were around 245,000 problem gamblers in England. A Public Health England study last year estimated that there were 409 suicides a year associated with problem gambling.
Campaigners want a new levy on the industry to fund research and treatment for problem gamblers. They also want to see tighter controls on what players can afford to pay, new betting limits on online slot games, a ban on gambling advertising in sports, and a ban on VIP programs.
Documents released under freedom of information laws reveal executives of Bet365, Flutter, which operates the Paddy Power and Betfair brands, and Entain, which operates the Ladbrokes, Coral and PartyCasino brands, held an online meeting with tax specialists from the Treasury and Revenue and Customs. on October 7 last year and warned of what they feared was excessive regulation proposed as part of the review.
Betting companies have submitted an industry-commissioned PricewaterhouseCoopers report which found an increase in unlicensed online gambling in the UK. Betting companies have warned that the black market could be fueled by a sweeping overhaul of gambling laws.
A two-page document presented to officials warned: “It is essential that the government takes a comprehensive view of tax and regulatory changes over the next few months, otherwise there is a very real risk that the UK remote gaming sector will be affected. in a way that not only reduces its economic and tax contribution, but also increases levels of gambling harm by incentivizing to switch to unlicensed gambling operators who pay no tax in the UK.
He added that executives would be keen to engage in further dialogue with tax authorities to discuss developments “as the DCMS prepares its white paper for publication.” The betting industry opposes the legal levy proposals and what it claims are overzealous controls on what customers can afford to bet.
Industry lobbying details have angered relatives of those who lost their lives as they struggled with gambling addiction. The Gambling with Lives charity, a community of families bereaved by suicides related to gambling, spearheaded the campaign for reform. Judith Bruney, 62, from Sheffield, whose 25-year-old son Chris killed himself in April 2017 after betting £119,395 in five days without spending cheques, said: ‘The industry wants out shoot with as little change as possible. Surely they must know what damage it causes.
Charles Ritchie, co-founder with his wife Liz of Gambling with Lives, said a package of further reforms was needed, including revamping the most addictive games and tougher penalties on the industry when it fails. has not implemented player guarantees. He said: “You have a very profitable industry and fines can be seen as a cost to business. We need a more effective sanctions regime.
Matt Gaskell, clinical manager at the NHS Northern Gambling Service, backs a legal levy for industry to fund research and treatment.
He said: “Many operators have not fulfilled their obligations under the voluntary system. A legal levy would ensure a stable and sustainable funding system.
The Betting and Gaming Council, which represents the gambling industry, says it supports the gambling review, but also needs to strike the right balance between protecting the vulnerable and not “spoiling the pleasure” of those who bet safely. He says the industry is taking a range of measures to protect gamblers who may be at risk, and Gambling Commission figures show the number of compulsive gamblers is falling.
Betting companies have been criticized over the years for basing their operations overseas – notably in Gibraltar and Malta – which can lower their tax bills. Bet365 is headquartered in Britain and claims to be one of the biggest tax payers in the country.
A spokesperson said: ‘It is entirely normal and appropriate for the government to generally engage with us and others in our industry as part of its ongoing review of gambling law , as would be the case in all sectors undergoing potentially significant regulatory changes. ”
A spokesperson for Entain said: “Entain is proud to be one of the UK Treasury’s top 20 corporate taxpayers. As such, and like thousands of other UK businesses, we are of course in regular contact with HMT and HMRC officials.
A Flutter spokesperson said: “Flutter paid £1.6bn in tax globally last year, including over £600m in the UK where we are one of largest corporate taxpayers. We work with a range of stakeholders, including HMT, and are proud of the significant contribution we make to the UK economy.
Treasury officials said they meet regularly with stakeholders from across the industry to hear their views.