Betting and gaming duties are levied on either operators’ gross profits (total stakes received less prizes paid out) or total stakes across several different gambling regimes.
In our latest forecast, we expect betting and gaming duties to raise £3.2 billion in 2019-20. That would represent 0.4 per cent of all receipts, and is equivalent to around £110 per household and 0.15 per cent of national income.
Total betting and gaming duty receipts are the sum of several specific duties:
- Lottery duty – charged on taking a chance or ticket in the UK National Lottery. The duty liable is a fixed proportion of total ticket sales. All lawful lotteries are exempt from the duty except the National Lottery. It is also payable on scratch cards and UK sales of Euromillions. Lottery duty raised £831 million (29.1 per cent of the cash total) in 2017-18.
- Machine games duty (MGD) – charged on the playing of machine games that pay out cash prizes. These include slot, fruit and quiz machines, as well as fixed-odds betting terminals. The duty paid depends on how much it costs to play a game, and the size of the potential prize. MGD is not payable on machine games that offer only non-cash prizes or where the cost of playing is greater than any cash prize. It was introduced in early 2013 and replaced the amusement machine licence duty (AMLD). MGD raised £712 million (24.9 per cent of the cash total) in 2017-18.
- General betting duty (GBD) – charged on bookmakers’ profits for ‘general bets’, which include sports betting and bets on horse or dog racing, and their profits for spread bets, but exclude on-course betting. The duty paid depends on the type of bet and where it is made. In 2017-18 this raised £572 million (20.0 per cent of total cash betting and gaming duties).
- Remote gaming duty (RGD) – charged on gaming provider profits from remote gaming (for instance, games played online). This includes the profits from any ‘free plays’ the provider offers. ‘Free plays’ are any offers to gamble at zero or reduced rates, and include free games, introductory bonuses or matched deposits. The duty paid is a fixed rate of the provider’s profits. RGD raised £443 million (15.5 per cent of the cash total) in 2017-18.
- Gaming duty – charged on the gross gaming profits of UK-based casinos. The duty paid follows a banded structure, so more profitable casinos pay proportionately higher rates. It raised £265 million (9.3 per cent of the cash total) in 2017-18.
- Bingo duty – charged at a fixed rate on the gross profits of the bingo promoter. All bingo games played in the UK are liable to the duty, except domestic bingo, small-scale bingo, non-profit bingo and bingo played on machines covered by MGD, which are all exempt. Bingo duty raised £32 million (1.1 per cent of the cash total) in 2017-18.
- Pool betting duty (PBD) – charged on bookmakers’ profits for bets where winners have a share in a pool of a stake of money. PBD is paid at a fixed rate and raised £5 million (0.2 per cent of the cash total) in 2017-18.
On-course betting (where customers are present at the racetrack) is not liable to any of the above duties. It is covered instead by the horserace betting levy (HBL), which is charged on the gross profits of all betting on British horseracing (whether made on-course, in betting shops, or online). Receipts are collected by the horserace betting levy board (HBLB) – a UK statutory body. The levy raised £108 million in 2017-18.