The UK’s Gambling Sector Shrank Last Year

The gambling sector shrank (hooray for the haters!) but Betting Duties increased (double hooray for the haters, but also for the people who like taxes)

That’s right: we have haters! Can you adam and eve it? Something about encouraging people to do things they shouldn’t.  But it’s like anything in life: everything in moderation including banning things that some people enjoy. We have plenty of help and advice for those of you who need it, but many people gamble for fun and stop at appropriate moments.

But if that first paragraph got under your skin, then you’re probably one of our haters, in which case, you’ll love this next bit of news! The gambling sector actually shrank during the pandemic.

HMRC announces a fall in gambling revenue for 2020/2021

Last year, we covered news stories about a rise in online gambling during the pandemic. As casinos closed, and with people stuck at home with more time on their hands, gamblers flocked to the online casino. This was a boon for the industry, or at least it appeared to be.

According to the latest figures from HMRC, the boon didn’t translate into an increase in revenue for the gambling industry.

In the tax year 2020 to 2021, revenue totalled £3.01bn for the gambling industry. In the tax year 2019 to 2020, the revenue total was £2.83bn. That’s a drop of roughly £180m.

What accounts for the change?

Clearly, last year was a weird one for everyone, and the gambling industry didn’t escape the pressures. With the closure of non-essential retail (e.g., betting shops) and the cancellation of sporting events, it’s clear to see why there was such a large impact on gambling revenues.

The closure of real-world casinos and gambling events did lead to an increase in online gambling, but the increase in online revenues didn’t offset the decrease in revenues from bricks and mortars gambling ventures.

You may find this next statistic unusual, but I’ll explain why: despite a loss in revenue, the total tax receipts for Betting Duties collected by HMRC actually increased from £591m in 2019 to £604m in 2020.

This is because HMRC sets the tax duties for online gambling at a higher rate to real-world gambling. For example, any organisation that offers online gambling to someone who normally lives in the UK must pay duties. Whether they do is a different matter, but evidently, some are. So, even though fewer people appeared to gamble, the tax owed was higher nonetheless.

Tax receipts from online gambling were £885m in 2020-2021, an increase of £179m compared with 2019-2020.

The highest tax income for the HMRC continues to be the Lottery Duty. A large portion of the lottery duty comes from the National Lottery. Unusually perhaps, Lottery Duties registered tax receipts of £101m, which are pretty much stable compared to previous years.

Summing it up

If you hate gambling, you’ll be pleased to learn that the industry shrank last financial year, despite fears it would grow. It’s not so good for the HMRC, but online gambling is helping us keep the coffers just as full as usual.

A picture of dice lined up in a row. They are all different colours, from left to right they're red, white, yellow, blue, pink, and green. On a black background. It's to represent the gambling sector.

Author: webmaster

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