It's not death ... however it is taxing - Britain's wagering market lives on the leakages and rumours of the upcoming Budget, a state of play that is not healthy.
Horse racing appears to have scored a big win earlier today when it was reported by the Telegraph that the heritage sport was going to be exempted from tax hikes on wider wagering activities.
Yet with simply 2 weeks to go up until the Autumn Statement is delivered, it discovers a meagre success in a fight of lobbying and tabloid headlines surrounding this Labour government's 2nd budget.
The market's arguments have actually been loud and clear for the previous few months, with comparisons made with the Netherlands and the growing hazard of the black market put as the counterpoint to tax increases. But with politicians appearing numb to the fracas of tabloid headings, perhaps the most reliable proof needs to be drawn from leadership and the facing them.
Sam Sadi, CEO of LiveScore Group, operator of the LiveScore Bet and Virgin Bet brand names as well as its flagship LiveScore media app, heads up a business with experience of both the UK and the Netherlands - at least it did have experience of the latter up until exiting this year.
"Our decision has actually been confirmed, and we have actually understood the direction of travel and the kind of ideology that the federal government, clearly associated to the regulatory body, has adopted," Sadi told SBC News.
"I think we do benefit right now from having actually left earlier, since a great deal of capital was wasted in the country trying to get to profitability."
Sadi talked to us at the SBC Summit in Lisbon this September when the tax dispute was starting to warm up with the speculation of tax increases above a GGR of 50%. At the time, he shared that at LiveScore 'we do not think the UK government is going to act so irresponsibly'.
While it has actually looked increasingly more most likely that the UK will increase taxes on video gaming in some type, the Netherlands stands out as ground-zero on the consequences of applying abrupt taxes.
Since re-regulating its online market in October 2021, the Netherlands has presented much more stringent rules around advertising in specific, entering into result in 2024 and 2025. The tax increase to 34.2% of gross video gaming earnings (GGR) on 1 January this year, set to increase to 37.8% in 2026, is a bitter cherry on a hard cake for the industry.
Sadi remarked: "I believe what the Netherlands has actually done to regulate the market and then, within 2 years, boost taxes significantly however likewise increase regulative and compliance costs in such a manner that all your investment plans and forecasts have been made outdated, is extremely unusual.
"While the size of the market may not have actually been affected by it, all it has done is consolidated the market towards 2 or three operators, and it omitted all smaller operators like myself.
"I do not believe the UK government will be so short spotted, and I think they'll invest in a more sensible way."
An Irish goodbye or French exit from Dutch market?
Betting and racing have actually both entered into marketing overdrive in opposition to rumoured tax increases - rumours which are looking increasingly like pledges as Chancellor of the Exchequer, Rachel Reeves, hinted previously this year that operators should 'pay their fair share'.
In response to tax raises, the Betting and Gaming Council (BGC) has been associated with a substantial media campaign and has fulfilled with numerous political figures. The British Horseracing Authority (BHA), on the other hand, started its #AxeTheRacingTax project and called strike action on 10 September, the latter illustration criticism from the BGC.
Should reports from The Telegraph last Sunday show precise, racing's project may have paid off. This week, Dom Tomlinson MP, Exchequer Secretary to the Treasury, meant prospective additional engagement with the BHA when reacting to a question in your house of Commons from Sally Jameson, a fellow Labour politician and MP for Doncaster Central.
"My honorable good friend is a strong supporter for the horse racing industry and for the jobs and economic activities in her constituency," Tomlinson said. "I was delighted to consult with her simply last week to go over the topic that she raises today as part of the consultation.
There has actually been engagement with the horse racing industry to determine any possible unintentional repercussions for their sector and how they might be alleviated. The government will respond to the assessment of the spending plan and ... I will happily meet with the BHA."
Credit: ribeiroantonio/ Shutterstock
The obstacle the industry deals with remains in encouraging other political leaders that the worst case circumstance of the Netherlands is a major one to consider. The MPs of the Treasury Select Committee did not appear too receptive to this comparison when made by Grainne Hurst, CEO of the BGC, during a hearing late last month.
For LiveScore's Sam Sadi, the effects of heavier tax on betting are 'not that various from any other industry', and he included that 'the repercussions of increasing taxes are rather well understood'.
"That would imply we invest less on marketing, or we have to cut costs, which implies we employ less," he said. "These are all understood effects of what takes place when you increase taxes on any industry, and I think the approach of legislators to industries such as online gaming has actually been that taxation does not have these impacts.
"But they stop working to understand that all the operators, all the industry have needed to have actually been forced to cut expenses as an outcome of decreasing margins, and that has a direct impact on the economy.
"You might be getting more taxes in the first location, but you're hurting the total economy. It's not a discussion particular to our market. It's the exact same as if you attempt to add taxes to e-commerce, and e-commerce starts diminishing as a market."
Improvise, adjust, conquer
LiveScore itself stands as an example of what can happen in the worst case scenario of tax adversely impacting a company - that organization will simply be required to withdraw from the market.
Again, the Netherlands comes up here. The heavier burdens of tax implied that it was no longer worth it for LiveScore to bring on operating in the country, therefore it reduced efforts in more cost reliable markets.
While Sadi might be confident that the UK will not share the 'irresponsibility' of its equivalents in the Netherlands, and LiveScore as a brand may well be positioned to ride out tax challenges, other little and medium sized bookmakers might not be so fortunate.
The UK's tax dispute has seen two circumstances. The first of these was a merger of 21% Remote Gaming Duty (RGD) and 15% General Betting Duty and Pool Betting Duty to one 21% rate. This was supported by the likes of previous PM Gordon Brown as a way to relieve the UK's admittedly dismal rates of childhood poverty.
In case of horse racing's exemption, the 20% machine video games task (MGD) and 21% RGD will bear more of a problem. It has actually been predicted that the previous could rise to 50% and the latter to 40%.
For smaller bookmakers, issues still abound that tax hikes could clean them off the map. David Pluck, an independent bookmaker with a chain of shops in North West England, informed the Racing Post this week that "there won't be any betting shops left very soon if the most significant tax boosts being talked about been available in".
In LiveScore's experience of the Netherlands, the firm had the ability to dodge the tax bullet and reinvest somewhere else. For firms like these with an international presence this is constantly an alternative, even if it indicates leaving what has actually been one of the world's most profitable and extensively related to regulated markets in the UK.
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"It permitted us to shift capital and focus to other markets, and that's likewise something that regulative bodies comprehend," Sadi showed on the Dutch exit.
"Companies have a choice where to designate capital, which's not just a financial investment that we're no longer making into the Netherlands in types of marketing, but likewise in regards to employment.
"We certainly do not have a Netherlands-facing group any longer, which is work that the marketplace no longer obtains from us and from lots of other operators. We have actually shifted our focus and our capital to markets where we think we have a long term possibility of reaching success - that's just economics 101."
Rachel Reeves took an unusual step earlier this week when she made a speech from Downing Street ahead of the budget, something not usually carried out in UK politics. For lots of observers, this was efficiently a confirmation that taxes will increase.
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'That's Just Economics 101' - Learning from LiveScore's Experience of The Dutch Tax Fiasco
marisolworth27 edited this page 2026-04-29 03:48:47 +08:00