Budget Hits Land-Based Slots Whilst Taking Aim at Online Casinos

The UK’s budget this week has induced widespread panic among operators of land-based slot machines, with the new Machine Games Duty (MGD) enforcing a levy of 20%.

It replaces the Amusement Machine Licence Duty which was set at just 17%, and analysts have already calculated the expected impact on UK bookmakers, with William Hill and Ladbrokes predicted to suffer losses of £11m and £14 respectively.

Online gaming operators, however, should not be breathing a sigh of relief: The government has also announced it plans to introduce an online gaming tax of 15%:

To date this would not have bothered any of the major UK online betting outfits as they are virtually all located offshore in Whitelisted jurisdictions: These tax havens – such as Gibraltar, Alderney, Malta and the Isle of Man are recognised by the UK authorities as offering regulatory standards equivalent to the UK and consequently make an ideal location for any major online betting operation, however eligibility for the new tax will be determined by the gamer’s country of residence.

However, the effects are unlikely to be felt until 2015, whereas the MGD will kick in from next February. The Association of British Bookmakers claim the fruit machine levy will risk 11,000 jobs with 2,600 outlets likely to make staff cuts, and called the tax “unsustainable”.