U.K. Capitalizes Gambling Revenue Amid Ethical Criticisms

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Considering the United Kingdom’s relaxed policies on gambling and open betting terminals and lottery kiosks, complaints about the damage to such immediate environmental access to gambling especially regarding children, concerns many. In the UK, sixteen-year-olds may buy a national lottery ticket while eighteen-year-olds can gambling in casinos and bet at racetracks. Online advocates are calling on the government to block and prohibit video games with loot boxes which act as a form of gambling and is introduced to children at a young age in the form of video games, creating young gambling addicts. However, those wanting action may regretfully learn that their demands could take years to take effect as those in Parliament and in the Government of the United Kingdom benefit from the creation of more gamblers.

The government also obtains tax revenue from online operators and players by charging licensing fees and consumption taxes. The latter is a hot seat issue as critics shame the government for delaying the reduction of maximum bets on their most addictive gambling form, fixed-odds betting terminals, for two more years. These terminals can take £100 wagers every twenty seconds. The reduction would force maximum bets of only £2 to be placed, minimising the destructive high-frequency capabilities of larger max wagers. The projected year for this reduction to take place is 2020. The delay was given two reasons, one to provide operators with ample time to adjust their software and fear from the Treasury on losing tax revenue. The Treasuries’ fear of losing out on tax revenue could be a connecting point between their relaxed gambling laws and the hefty taxes and fees.

Many critics argue that the government had succumbed to the will of the operator and that the Treasury is choosing profits over its people. Gambling addiction is a rising issue in the United Kingdom and maintaining systems which do not consider player safety by offering large highly repetitive bets further harms vulnerable gambling addicts. Whether it is the government’s intention to do so is unknown. However, parallels could be drawn to the slow reaction of the government in terms of lowering max bets to their delayed response to parents demanding something be done about early gambling introductions in video games. Speculations only, of course.

To feed further suspicion, the UK Treasury has already responded with a remedy for potential revenue loss of minimising max wagers. The government stated that it intends to offset the losses that would prospectively begin in 2020, the UK Government along with the Treasury in mutual agreement plan to increase consumption tax on gambling by mid-2019. This would raise the already 15% consumption tax on sports betting. The new consumption tax rate has yet to be announced. It should be noted that any rise in taxes on operators can translate to costs placed on the customer. If there was a doubt that the Government of the U.K. needed money, these attempts to capitalize on any and all gambling revenue should put that question to rest.

The United Kingdom has faced many criticisms over its insatiable desire for gambling tax revenue. An example can be derived from the UK’s sizable corrective penalties toward gambling businesses licensed in the U.K. for not meeting and upholding social responsive and AML policy requirements. In 2018, penalties have increased in citation volume and in an effort to lower the surmounting number of violations; fines will rise as a result.

A notably large penalty of £2m was paid by 32Red and online operator who failed to stop consumers with problem gambling from playing at high frequencies with large repetitive deposits. Claims made by the U.K. Gambling Commission stated that clear signs of problem gambling were ignored by 32Red, in addition to accounts who deposited large funds without proper screening for money laundering prevention. The company was also found grossly encouraging large spending with frequent and generous deposit bonuses. With the increasing volume of companies committing similar violations, the UK Government has surmounted enormous penalty fines, all of which are held within the Treasury. It appears the companies have gotten greedy themselves.

Clearly, the government is seeking to build their Treasury funds by any means necessary. This could be a product of lackluster results after Brexit and currency fluctuations. Either way, the United Kingdom is looking to build a better financial security net and the substantial profits raked in through gambling provide one route to riches.