UK LEGAL
SPREAD BETTING
The consultation includes questions on whether spread betting should be included in the tax. Spread betting is currently taxed at 10% for sports spread bets and 3% for financial spread bets. The consultation notes that, unlike other duties for remote operators, spread betting continues to be taxed on a place of supply basis. The majority of remote spread betting is offered by UK-based companies, so the Government does not propose to alter this approach. Nevertheless, as a remote gambling activity spread betting would fall within the new RBGD. The Government will consider whether this would be appropriate, or if it should be subject to a different tax regime. The consultation is open until 21 July 2025.
the customer would have paid for that stake is included on one side of the calculation and any amounts paid out to those customers as winnings on the other side. However, for PBD, free bets are not included, which also means that only money won from taxable wagers can be deducted as winnings. The Government proposes to align the rules for general betting and pool betting, so that free pool bets will be part of the calculation as they currently are for general betting.
When it comes to freeplays in remote gaming, currently just the ‘first use’ of a freeplay is included in the duty calculation at its notional value. Where the customer must re-wager any winnings a certain number of times before being able to withdraw their winnings as cash, those subsequent re-wagers are not included in the duty calculation (i.e. tax is not paid on the re-wagered amount). In the consultation, the Government states that this re-wagering exception is “complicated and creates a risk of freeplays not being accounted for correctly” and has “been seen by some as an opportunity to reduce their tax liability with increasingly contrived arrangements”.
In the consultation, the Government invites comments on removing the re- wagering exception. It asks for data on the percentage of operators’ profits which relate to offering freeplays, how the Gambling Commission’s new rules limiting wagering requirements to 10x from December 2025 will affect their offers, and what level of winnings customers typically receive as a percentage of the original freeplay amount. The outcome of this may be to remove the re-wagering exemption, to create a consistent rule across RBGD.
The Government also proposes to align the tax treatment of prizes. Under GBD and PBD, cash prizes can only be deducted from
20 MAY 2025
taxable profits if they are the result of the customer winning their bet. Under RGD, the cost of cashback incentives and consolation prizes can, in some cases, also be deducted. The Government plans to bring remote gaming into line with remote betting, so that only prizes won can be included in the calculation.
Overall, these changes will very likely result in an increased tax burden for remote gaming.
TREATMENT OF ANCILLARY REMOTE GAMBLING
The Government is considering the options for gambling offered by premises-based operators, but which falls within the licensing requirements for remote gambling. In particular, gambling offered on Self- Service Betting Terminals falls within the scope of remote gambling so would in theory be captured by the new RBGD. Bingo and casino table games played on terminals, on the other hand, would remain subject to Bingo Duty and Gaming Duty respectively. The Government is therefore considering putting specific exclusions in place so that activities conducted under an ancillary remote licence are not within the scope of RBGD.
Melanie is a gambling regulatory lawyer with 13 years’ experience in the sector. Melanie advises on all aspects of gambling law including licence applications, compliance, advertising, licence reviews and changes of control. She has acted for a wide range of gambling operators including major online and land-based bookmakers and casinos, B2B game and software suppliers and start-ups. She also frequently advises operators of raffles, prize competitions, free draws and social gaming products. Melanie has a particular interest in the use of new technology for gambling products and novel product ideas.
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