Budget not expected to be kind to bookmakers with tax increase in store

Bookmakers are braced for challenging news in Monday's Budget as chancellor Philip Hammond is poised to increase tax on offshore gambling companies, which will help government offset the forthcoming shortfall resulting from changes to FOBT stakes.

The government in May announced regulatory changes to FOBT limits, reducing the maximum stake to £2 from £100, a move that could cost racing £50 million a year.

Hammond is expected to raise remote gaming duty to 20 or even 25 per cent from 15 per cent, although research from betting industry insiders stipulates the rate should should be no more than 20 per cent if it is to be revenue neutral, i.e. not increasing the tax burden.

It is also said to recommend changes to FOBTs and the increase in tax should take place at the same time, but that might not be the case.

Hammond initially, it is believed, planned to delay the cut to FOBT stakes until April 2020, although outcry from that proposal is said to have forced a rethink to April next year. The Westminster rumour mill suggests a middle ground of October 2019 has been reached.

The delay in implementing FOBT stake changes was supposedly to allow bookmakers and machine suppliers to make the changes and mitigate closures and job losses. Nobody in government has said the delay is to get more tax revenue – although many suspect that to be the case.

FOBTs: cut to the £2 maximum stake might not take place for another 12 months

Dubbed the crack cocaine of gambling by their opponents, FOBTs have been a divisive issue in parliament and shares in William Hill slid as the bookmaker posted a loss for the first half of the year in August following the government's planned restrictions.

BHA chief executive Nick Rust, however, in July stressed that relevance to the wider world is the real challenge facing British racing, not the threat to the sport's income from regulatory action against FOBTs.

"In my view the real challenge is not a potential fall in revenues because of legislation affecting betting shops but rather our overall relevance to the British public," he said at the time.

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