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Online gambling should face £100 a month cap on spend

by LLB Editor
5th Aug 20 9:20 am

Gamblers should be protected by a new £100-a-month cap on spending to limit the harm that can be done by online gambling, a think-tank recommends today.

The Social Market Foundation also calls for a sweeping overhaul of the way gambling firms are taxed, to put financial pressure on companies registered abroad to bring their operations to Britain.

The SMF, a cross-party think-tank, proposed a comprehensive new framework of regulation and oversight for a gambling sector increasingly dominated by online playing. Its report comes ahead of a Government review of the 2005 Gambling Act, which ministers have said is not suitable for an era of online gambling.

The report recommends new “affordability checks” to protect gamblers from serious financial harm. It proposes a “soft cap” on spending where anyone who wanted to spend more than £23 a week on gambling products would have to prove they could afford to lose the money without hardship.

The majority of gamblers spend less than the proposed cap and would be unaffected (See Note 1) but the SMF said the new limit would protect players on lower incomes from potential harm.

The report also said that the stake limits on online slot games proposed by regulators should be set between £1 and £5. Non-slot online gambling games should face new restrictions on the way they are designed rather than financial limits, the SMF said.

The report also proposes a complete reform of the way gambling operators are taxed, to put greater burdens on firms based offshore in Gibraltar or the Isle of Man, and reduce the tax faced by companies that bring their operations “onshore”.

Gambling operators should be assessed according to their “onshore footprint”, a minimum threshold for their capital, human, social, legal and digital presence in the UK.

The smaller a firm’s footprint, the higher the levels of Remote Gaming Duty and Betting Duty they should face, the SMF said. The proposed system would reward companies that bring their operations to Britain, while increasing the costs of operating “offshore”, the report said.

“Gambling taxation should be redesigned around a system of incentives which reflect a company’s level of onshore presence. This means that operators could still decide to base their headquarters in locations like Gibraltar, the Isle of Man, or Alderney, but that decision would carry significant tax implications,” the SMF said.

The report also calls for a comprehensive shake-up of Whitehall and the public bodies overseeing gambling and gamblers. The structures created by the 2005 Gambling Act are “no longer fit for purpose,” the SMF said.

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