Companies: RNK   

The UK-facing gaming industry was sent reeling by the latest contents of Gordon Brown’s red box, having expected further measures to unshackle the industry.

Many gaming insiders were expecting the Chancellor to tempt online operators based in offshore tax havens into coming under the UK authorities’ licensing and regulation umbrella by imposing a negligible remote gaming duty. But Brown instead produced something of a shock for all concerned when he slapped on a 15 per cent duty instead.

Karen Potts, a partner at Deloitte, believes that the tax rate alone is not enough to tempt the online operators onshore, ‘but at this rate it will be a disincentive and is unlikely to encourage operators to operate from the UK and apply for a Remote Operating Licence.’

Among casino operators there was even more dismay, as the Chancellor restructured gaming duty from its current sliding scale between 2.5 per cent and 40 per cent to one that slides between 15 per cent and 50 per cent. Potts says the new scale may make casino operators less likely to bid for casino licences and could well produce a reduction in the number of companies bidding for the small, large and regional casino licences. ‘While a revised scale of duty was widely expected, many operators expected duty to be lowered rather than raised ahead of the casino licence bidding process.’

Fully listed Rank Group was ‘dismayed’ by the Budget, and estimates that the increase in casino gaming duty for Rank ‘will be of the order of £8 million on an annual basis’.