UK chancellor George Osborne has announced changes for Point of Consumption Tax (POC) and Fixed-Odds Betting Terminals (FOBTs). New tax laws for the UK gambling industry are in the government’s Budget for 2014, with the tax rate for FOBTs increasing to 25%. Additionally, the bingo duty would be cut to 10%, and the government will proceed with plans to introduce a 15% POC tax for remote gambling.

UK bookmakers in particular were hit with the announcement that the tax rate for FOBTs will be increased from its current rate of 20% to a new rate of 25%. Shortly after this was confirmed, the share prices of bookmakers Ladbrokes and William Hill fell by 12% and 7%, respectively. The increase in FOBT duty has come in response to heavy criticism of the machines, which have been cited as a source of gambling problems by MPs and campaigners alike.

However, the Campaign for Fairer Gambling lobby group said that the Point of Consumption Tax hike will do “little” to help problem gamblers in the UK. Adrian Parkinson, consultant for the Campaign for Fairer Gambling, said: “A 25% tax rate on FOBTs may well wipe £78 million off the bookmakers’ profits – but does little to protect those affected by problem gambling.

“It will be suggested that this move will slow down the proliferation of betting shops on high streets, but the addictive nature of FOBTs means the bookmakers will still be raking in huge sums. The government should be looking at dealing with the root of the problem – the high stakes and high intensity play of FOBTs, rather than tax the losses of those addicted to them.”

Meanwhile Osborne said that a cut in bingo duty from 20% to 10% was prompted by the fact that the number of bingo halls in the UK had “plummeted by three quarters over the last 30 years”. This story on the Point of Consumption Tax and Fixed-Odds Betting Terminals was originally published on the iGaming Business website.