It has been revealed that some of the British betting giants have been silently lobbying Treasury officials against the proposed crackdown on the industry, claiming it would cost millions of pounds in lost tax revenue.
Executives representing Bet365, Paddy Power and Ladbrokes met with Treasury, Revenue and Customs officials to warn that a radical change in the industry could drive gamblers off the black market. The meeting was with tax officials, not ministers, and therefore was not required to be disclosed automatically.
The betting industry claims that there is a “very real risk” that the taxes of around £ 3.2 billion a year provided to the Ministry of Finance will be affected by stricter rules for the sector. A government white paper on gambling reforms is due soon.
Matt Zarb-Cousin, director of the Clean Up Gambling campaign group, said: “The industry is trying to dilute the proposed gambling review reforms by lobbying tax officials under the radar. This is massive propaganda from an industry that has been dealing with tax evasion for years. I hope the treasury didn’t buy it. There must be full transparency regarding this lobbying campaign. “
The Ministry of Digital Technology, Culture, Media and Sports has announced a review of gambling laws in December 2020 amid fears that too many people are suffering significant damage. An NHS survey in 2018 showed that there are about 245,000 troubled players in England. A public health survey in England last year estimated that there are 409 suicides a year related to problem gambling.
Campaigners are demanding a new tax on the industry to fund research and treatment for problem gamblers. They also want to see tighter checks on what gamblers can afford to pay, new limits on betting on online slot games, a ban on gambling in sports and a ban on VIP schemes.
Documents released under the Freedom of Information Act reveal that the leaders 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 specialists from the Ministry of finance and revenue and customs taxes on October 7 last year and warned against what they feared could be excessively proposed regulations in the review.
Betting companies presented a report from PricewaterhouseCoopers, commissioned by the industry, which found an increase in unlicensed online gambling in the UK. Gambling companies have warned that the black market could be fueled by a comprehensive overhaul of gambling laws.
A two-page document presented to officials warns: “It is vital that the government takes a holistic view of tax and regulatory changes in the coming months, or there is a very real risk that the UK gambling sector will be affected in a way that does not not only reduces its economic and fiscal contribution, but also increases the levels of gambling damage by encouraging the shift to unlicensed gambling operators who do not pay tax in the UK.
Chris Bruni committed suicide in 2017 after betting £ 119,395 in five days.
He added that executives would be willing to engage in further dialogue with tax officials to discuss developments “while DCMS prepares its White Paper for publication”. The betting industry opposes the mandatory tax proposal and what it claims would be overly zealous checks on what customers can afford to bet on.
The details of the lobbying by the industry have angered relatives of those who lost their lives while captive to gambling addiction. The charity Gambling with Lives, a community of families grieving gambling-related suicides, has spearheaded a reform campaign. Judith Bruni, 62, of Sheffield, whose 25-year-old son Chris committed suicide in April 2017 after betting £ 119,395 in five days without spending checks, said: “The industry wants to get away with the minimal change that can. Surely they need to know what damage it causes.
Charles Richie, co-founder with his wife Liz of Gambling with Lives, said there should be a package of new reforms, including a redesign of the most addictive games and tougher sanctions against the industry when it fails to enforce player safeguards. He said: “You have a highly profitable industry and fines can be seen as a cost to the business. There must be a more effective regime of punishment. “
Matt Gaskel, clinical director of the NHS’s Northern Gambling Service, supports a tax law for the industry to fund research and treatment.
He said: “Many operators have not fulfilled their obligations under the voluntary system. The legal fee would provide a system for stable and sustainable financing.
The Gambling and Gambling Council, which represents the gambling industry, says it supports the gambling review, but must also find the right balance between protecting vulnerable people and not “spoiling the fun” of those who gamble safely. It says the industry is taking a package of measures to protect gamblers who may be at risk of injury, and that data from the Gambling Commission shows that the number of gamblers is declining.
Betting companies have faced criticism over the years for basing their operations abroad – including in Gibraltar and Malta – which could reduce their tax bills. Bet365 is based in the UK and says it is one of the largest taxpayers in the country.
A spokesman said: “It is perfectly normal and appropriate for the government as a whole to engage with us and others in our industry in the context of the ongoing review of the Gambling Act, as would be the case in all sectors subject to potentially significant regulatory changes. ”
A spokesman for Entain said: “Entain is proud to be among the top 20 corporate taxpayers in the UK Treasury. As such, as with thousands of other companies in the UK, we are, of course, in regular contact with HMT and HMRC employees.
A Flutter spokesman said: “Flutter paid £ 1.6 billion in global taxes last year, including more than £ 600 million in the UK, where we are one of the largest corporate taxpayers. We are committed to a number of stakeholders, including HMT, and are proud of the significant contribution we make to the UK economy.
Finance Ministry officials said they meet regularly with industry stakeholders to hear their views.
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