Sky Bet’s boss has tried to persuade Chancellor Philip Hammond not to increase gambling-related taxes in the upcoming Budget. According to the gambling operator’s Chief Executive Officer Richard Flint, such a step could restrain the company’s investment plans for its domestic markets.
The commentary of Mr. Flint came at a time when Sky Betting & Gaming, the parent company of Sky Bet, revealed a 38% revenue increase to £516 million. The operator’s EBITDA (earnings before interest, taxes, depreciation and amortisation) also rose by 38% in comparison to the previous year, reaching £146 million.
The online gaming and betting operator’s Chief Executive Officer revealed that the company was planning to create 200 high-tech jobs in Yorkshire. Up to date, a total of 1,300 people already work at the Yorkshire site of the brand.
As Mr. Flint explained, Sky Bet had written to the Chancellor and raised a red flag in terms of a possible increase of the 15% point-of-consumption tax which was officially introduced and imposed on gambling operators across the country on December 1st 2014. The point-of-consumption tax is currently payable on all bets made by local customers, regardless of the fact if it comes to a local or an offshore online gambling company.
Previously, foreign gambling operators had the chance to draw profit from bets made by UK players and their profits were not taxed. After the implementation of the point-of-consumption tax, however, some changes were made, with companies that moved their operations in off-shore territories such as Malta or Gibraltar, also became subjected to the new taxation.
Despite the fact that the UK Government has not openly suggested an increase of the gambling-related taxes, Mr. Flint shared that such a step was not impossible, as the Chancellor Hammond could look for additional cash flow from the sector. The Chief Executive Officer of Sky Bet explained that the company would prefer the higher taxes penalty than moving its operations out of the country, but this could become unsustainable in case that the taxes are increased too much.
According to information provided by Mr. Flint, Sky Bet paid taxes amounting to £153 million over the year ended on June 30th. As explained by him, the tax paid by the gambling operator was equivalent to approximately 30% of its revenue. Sky Bet’s boss further said that being based on the territory of the UK meant that VAT on the marketing expenditure was also paid, and this was not a tax that was imposed on the companies based in foreign territories.
Considering the fact that the Department for Culture, Media and Sports has just published its review of the industry and controversial fixed-odds betting terminals and the consultation period about the maximum stakes on the machines has already started, the gambling sector will probably avoid a tax increase.